Small worldliness, Chinese culture, and firm innovation performance: an empirical study based on patent collaboration data of China

Abstract

China is an Asian country that has a more collectivist culture compared with that of western countries. Furthermore, China is also different from other Asian countries and regions, for example, Japan, South Korea, and Taiwan, in terms of the social and political context. The small-world network thereby plays quite a different role in innovation in China. This paper expands on the existing studies by examining the impact of the small-world network on firm innovation performance using both quantity and quality measurements. With the intra-firm level patent collaboration data from China, we find that a more clustered patent collaboration network has a negative impact on firm innovation performance. Patent collaboration networks with greater small worldliness would harm firm innovation performance in China, which is quite different from the role played by small worldliness in western and other Asian countries. The path length has a negative impact, and the size of the connected component has a positive impact on firm innovation, which is similar to the role of small-world networks in western and other Asian countries. Our finding is suggestive to the firm managers who face the collectivist culture of China, which has greater emphasis on hierarchy and bureaucracy.