Does China Have an “Innovation Paradox”? Evidence from Chinese Colleges and Universities

Abstract

Whether an “innovation paradox” exists in the innovation process is worth studying. However, the existing literature has not reached a consensus regarding this. Using data on 547 Chinese colleges and universities from 2005 to 2016, we examine whether greater government intervention in innovation is more likely to stifle innovation. We find that with government-dominated “design innovation,” funding input and personnel input significantly promote innovation output, challenging the “innovation paradox.” The main reason is that they have complementary effects in promoting scientific research innovation. Additionally, personnel input has a more significant effect on innovation than funding input. The role of funding input in promoting innovation becomes less significant, whereas personnel input takes an N-shape relative to innovation. This research enriches the existing literature on China's innovation activities from the perspective of colleges and universities.