Technological capability, eco-innovation performance, and cooperative R&D strategy in new energy vehicle industry: Evidence from listed companies in China

Abstract

To promote low-carbon economy and sustainable energy consumption, new energy vehicles (NEVs), a typical eco-innovation, are drawing intensive attention from manufacturers, administrators and academics. Despite extensive literature investigates factors that affect research and development (R&D) of NEVs, yet little is known about the role of technological capability as well as the interaction between internal technological capability and external resources (e.g., ownership, government subsidy and external cooperation). This might lead to the overlook of technological capabilities and the misallocation of external resources. In present study, we investigate how firm-level technological capability (measured by R&D expenditure) affects its eco-innovation performance (measured by eco-innovation patents), as well as the moderating impacts of ownership and governmental support (i.e., subsidy). Further, we explore the correlation between firm’s technological capability and its R&D strategy (i.e., internal R&D or cooperative R&D). Our investigation is based on a unique set of panel data from 127 listed companies in the Chinese automotive industry, spanning from 2009 to 2018. The empirical findings demonstrate that firm-level technological capability is positively related to eco-innovation performance, and state ownership intensifies this positive relationship. Surprisingly, increasing government subsidy tends to weaken this correlation. The results also show that firms with higher technological capabilities prefer cooperative R&D, while those with lower technological capabilities tend to choose internal R&D. These findings promote the understanding on the cost-effectiveness of R&D investment in the NEV industry, and also shed light on the interactions of internal and external resources. The study offers managerial implications to promote the prosperity of the NEV industry.