Breaking Barriers, Building Businesses, and International Markets: Strategies of Female Innovators in the Chinese Market

Abstract

In China, which in the past was dominated by state-owned and male-led ventures, female entrepreneurs are now increasingly popular. However, the specific pathways to internationalization for female-owned firms in China and their contribution to the country’s economic growth remain unexplored. Based on the principles of the resource-based approach, the article explores the innovative strategies used by Chinese female-owned firms to overcome resource constraints, formal and informal institutional barriers to business internationalization (entering the global markets through indirect exports). The article puts forward and empirically tests 5 sets of hypotheses according to which Chinese female-owned firms are: 1) more efficient in internationalization through indirect export strategies; 2) more inclined to digital innovation; 3) not focused on innovation conversion, but rather on successful adaptation of existing offerings for international markets or efficiency gains; 4) do not prioritize innovation in communication technologies, focusing more on innovation to reach customers, build relationships and enter international markets; 5) use the female business ecosystem to obtain safer pathways to innovation, such as external partnerships or adapting existing technologies, rather than focusing on investing internal R&D with elevated risk. Within each block, 2 additional hypotheses were put forward. They consider the impact of the relevant factor (digital innovation, innovation conversion, communication innovation, internal innovation) on indirect exports and its role in mediating the relationship between female ownership and the success of business internationalization. The study is based on a sample of 2,700 Chinese firms surveyed from November 2011 to March 2013 using the World Bank Enterprise Surveys China 2012 (a comprehensive recoding was performed, adhering to established practices in quantitative research). The control variables are the location of the respondent company in the capital/province, city size and firm size. The study used two types of factor analysis – Exploratory (EFA, including Promax rotation, oblique rotation method) and Confirmatory (CFA, Alpha Cronbach test, full path analysis model, including both direct and indirect effects, Monte Carlo method). SPSS 29 software was used for the data sample and AMOS 26.0 for the modeling process. A direct positive relationship was found between female ownership and indirect exports in China and digital ecosystem innovations, as well as between communication innovations and indirect exports. A significant negative direct relationship was found between female ownership and communication innovations, between digital ecosystem innovations and indirect exports, and between internal innovations on indirect exports. It also reveals the absence of a significant direct impact of innovation conversion on indirect exports. Mediating effects were also confirmed for communication and digital ecosystem innovations; partially for internal innovations; not confirmed for innovation conversion.