Curvilinear effect of policy intensity on innovation performance in the integrated circuit industry: Too much of a good thing?

Abstract

The improvement of innovation performance is critical to the high-quality development of the integrated circuit industry. Regional innovation cannot be delivered and sustained without the help of governments. This paper uses negative binomial regression to investigate the quadratic relationship between policy intensity and innovation performance in the integrated circuit industry at the city level and reveals how network centrality moderates this relationship. The results are given as follows. First, policy intensity exhibits an inverted U-shaped relationship with innovation performance. Second, after network centrality is introduced, the relationship between policy intensity and innovation performance shows a shape-flip from inverted U-shaped in low network centrality to U-shaped in high network centrality. Third, compared with exploitative innovation performance, exploratory innovation performance is more sensitive to policy intensity and needs higher network centrality to change the link from an inverted U-shaped to a U-shaped relationship. This research reveals the importance of incorporating cooperation into the interactive framework between policy and innovation, which provides guidance for fostering innovation in the global integrated circuit industry.