Abstract
This paper considers the role of firm ownership structure, absorptive capac-ity and agglomeration on firm innovation in the Chinese context. A popular co-occurrence measure is used to measure local spillovers expected to take place between similar but different industries co-located together. Relying on a large panel of Chinese firms, this paper offers three main results: (i) privately-owned enterprises (POEs) are more efficient innovators than their state-owned enter-prise (SOE) counterparts; (ii) local spillovers from related industries enhance firm innovation, especially for firms with higher pre-existing learning abilities; and (iii) despite possessing relatively high levels of absorptive capacity, POEs maintain higher innovation performance compared to their SOE counterparts. These findings help confirm the absorptive capacity thesis, but also suggest that possessing relatively higher levels of absorptive capacity, in and of itself, is not always a sufficient pre-condition for firms to overcome all of the cognitive and technological barriers to leveraging external sources of knowledge. In line with theories of knowledge governance, one explanation for this finding is that private (government) operators develop higher (lower) quality governance procedures that ultimately enhance (hamper) their ability to successfully integrate external sources of knowledge even after developing a high level of absorptive capabilities.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.