The role of state ownership and institutions in the innovation performance of emerging market enterprises: Evidence from China. (April 2017)

• Record Type: Journal Article
• Authors: Yi, Jingtao; Hong, Junjie; Hsu, Wen chung; Wang, Chengqi
• Is Part Of: Technovation. Volume 62/63(2017)
• Page Start: 4
• Page End: 13
• Publication Date: 2017-04
• Subjects: State ownership -- Marketization -- Industry policy -- Emerging market enterprises -- Innovation performance; Technological innovations -- Periodicals; Industrial management -- Periodicals; Innovations -- Périodiques; Gestion d'entreprise -- Périodiques; Electronic journals; 658.57
• DOI: 10.1016/j.technovation.2017.04.002
• Languages: English
• ISSNs: 0166-4972

Abstract

Abstract: Although it has been suggested that institutional context influences a firm's innovation performance, the role of regulatory institutions has been underexplored. Extending previous research, this study investigates whether and how regulatory institutions (i.e. state ownership, region-specific marketization and industry-specific institutional policy) affect innovation performance of emerging market enterprises (EMEs). Evidence derived from a large sample of Chinese manufacturing firms demonstrates that state ownership positively moderates the effect of R&D intensity on innovation performance. However, state ownership is not equally beneficial for all firms. Our analysis shows that region-specific marketization and industry-specific institutional policy enhance the innovation-enhancing effect of state ownership. By revealing the role of regulatory institutions, our study points to the importance of looking beyond firm boundaries to understand why EMEs are able to innovate despite their weak internal capabilities. Highlights: State ownership positively moderates the relationship between R&D and innovation. Marketization and industry policy enhance the innovation effect of state ownership Institutions provide the potential to pursue nonmarket strategies for innovation.