Institution-driven innovation in Guangdong firms: Moderating effects of in-house formal R&D and industrial environment turbulence. (22nd December 2019)

• Record Type: Journal Article
• Authors: Tang, Yongli; Hu, Xinyue; Petti, Claudio; Thürer, Matthias
• Is Part Of: Science and public policy. Volume 47:Number 2(2020)
• Page Start: 194
• Page End: 206
• Publication Date: 2019-12-22
• Subjects: innovation -- institutions -- regulations -- innovation policy -- China; Science and state -- Periodicals; 338.926
• DOI: 10.1093/scipol/scz058
• Languages: English
• ISSNs: 0302-3427

Abstract

Abstract: This article explores the moderating effects of in-house formal R&D and industrial environment turbulence on the relationship between institutional drivers, in terms of incentives and pressures, and firm innovation. Hypotheses were tested on a sample of manufacturing firms in Guangdong Province of China, where institutional changes and governmental policies play prominent roles in shaping innovation. Results show a positive main effect of institutional incentives, but an insignificant main effect of institutional pressures. In-house formal R&D and industrial turbulence negatively moderate the institutional incentives–innovations relationship, yet positively moderate the institutional pressures–innovations relationship. This study links the innovation systems literature with the institution-based view and deepens the understanding of the joint forces of institutional transitions, industrial changes, and resource heterogeneity in shaping innovation. The findings also inform managers and policymakers in institutional transition environments to better manage institutional drivers of innovation by considering firm- and industry-specific characteristics.