Institutional constraints of product innovation in China: Evidence from international joint ventures

Abstract

Research interests in product innovation and relevant success factors in an international context are increasing in the past decades. With the data from over 400 international joint ventures in China's manufacturing sector, this study explores China's institutional factors that may significantly affect product innovations in international joint ventures. The results show that while total R&D investment can increase China's international joint ventures' global product sales brought by new product innovations, local professional services and infrastructure including local universities and research institutes in China can also facilitate product innovation and patent applications. In addition, local market for talents and technologies in China has negative impact on international joint ventures' efforts to sell products overseas. This paper concludes with the discussions of the implications for Chinese government and international joint ventures in China's market.