Firm Technological Innovation Research Articles

Financial Service and Performance of Chinese Private Companies: The Mediating Role of Technological Innovation

Financial performance is one of the key essential elements of financial management. Therefore, this research is to investigate the effects of financial service on the financial performance of private listed firms in China and looks at how firm technological innovation plays a mediating role in this relationship. This study includes 4,635 private listed companies in China from 2013 to 2022 and adopts a robust fixed effects model for benchmark regression. In the robustness test, two-stage least squares, alternative proxies and time segmentation are used to back up the findings. It is found that financial service is significantly and positively related to firm financial performance. Moreover, there is a potential mediating mechanism of corporate technological innovation along this path of the influence of financial service on firm financial performance. The findings provide empirical evidence for private firms and related groups such as policymakers in China.

Navigating the Legal Minefield: How PAE Litigation Risks Shape Firm Technological Innovation

Navigating the Legal Minefield: How PAE Litigation Risks Shape Firm Technological Innovation

Volume and value of technological innovation: the role of corporate social responsibility and business architectural factors

The understanding of firm‐level drivers of technological innovation has been concentrated on a firm's core business related factors. How a firm's corporate social responsibility (CSR) initiatives impact a firm's technological innovation is notably understudied in the literature, even though business firms are increasingly recognizing the multifaceted impact of CSR on various corporate outcomes including technological advancements. This study bridges this gap by linking CSR to firm technological innovation as measured by both innovation volume and value. Furthermore, a set of business architectural factors, including market emphasis, related/unrelated diversification, and vertical integration, are incorporated as moderating factors to generate a granular understanding pertaining to CSR's innovation implications. We collected a large sample set, employed a series of robust empirical methods, and found that CSR has a consistently positive impact on both innovation volume and value, and the magnitude of these relationships differs across various business architectural factors. This study contributes to the innovation literature, strategic CSR theory, instrumental stakeholder theory, and provides useful guidelines for business practices.

Do high administrative‐level cities promote firm technological innovation? A novel analysis based on patent applications

AbstractThis paper examines the impact of China's administrative hierarchy of cities on firm innovation through the incentive policies that mobilize local governments to promote firm innovation. Using difference‐in‐differences approach, this paper finds that high‐level cities significantly and robustly enhance the number of firm patents. The results also suggest that alleviating firm financing constraints and leveraging human capital advantages are important mechanisms. In addition, high‐level cities mainly facilitate non‐state enterprises and small firms, and the quality of utility model patents was significantly lower and the quality of invention patents was higher in high‐level cities. This paper also presents several policy implications.

Pay structure and firm technological innovation: comparative research based on three pay gaps

While previous research has extensively explored the correlation between pay gaps and firm innovation, the comprehensive investigation of various pay gaps within a unified framework remains an understudied domain. We advance the understanding of the intricate relationship between pay gaps and firm innovation by examining the tournament effect and social comparison effect. Through empirical analysis spanning the period from 2009 to 2019 of Chinese listed companies, our findings reveal a potential inverted U-shaped curve in the impact of all pay gaps on firm innovation. Specifically, the effects of internal pay gap and management pay gap exhibit the left half of an inverted U-shaped curve, while the external pay gap demonstrates a complete inverted U shape. Additionally, utilizing fsQCA, we unveil that small firms can stimulate innovation through management pay incentives, internal tournaments, or employee tournaments. Conversely, large firms can pursue diverse paths, including management equity incentives, strategic emphasis on low pay for firm growth, or a harmonious combination of management pay and equity incentives. The intricate interplay between pay gaps and firm innovation is contingent upon industry and firm characteristics. Consequently, our study underscores the importance of meticulously designing pay structures that align with strategic goals and unique attributes.

THE INFLUENCE OF FIRM KNOWLEDGE CHARACTERISTICS ON TECHNOLOGICAL INNOVATION: A MULTILEVEL NETWORK STRUCTURE PERSPECTIVE

This study describes collaboration between firms and different organizations as a process of knowledge sharing, integrating inter-organizational collaboration networks and knowledge networks into a unified framework. It analyzes the bilayer structure of collaborative innovation networks, namely, the firm-knowledge bipartite network. The study investigates the impact of firm knowledge characteristics (diversity and uniqueness) on breakthrough and incremental innovation within collaborative innovation networks. The research employs patent data from Chinese A-share high-tech manufacturing companies listed from 2000 to 2018 and verifies the related hypotheses using a negative binomial regression model. The results suggest that, within collaborative innovation networks, firm knowledge diversity has a negative impact on breakthrough innovation but a positive impact on incremental innovation. On the other hand, firm knowledge uniqueness plays a positive role in breakthrough innovation but a negative role in incremental innovation. This study extends the understanding of firm technological innovation by considering both breakthrough and incremental innovation as distinct behaviors, providing a new perspective on the mechanisms underlying different innovation behaviors. By adopting a multilevel network structure approach to collaborative innovation, it contributes to a deeper understanding of internal and external factors influencing firm innovation behavior and expands the application scope of social network analysis.

Fintech Development and Firm Technological Innovation Efficiency: Empirical Findings in China

As a new combination of finance and technology, fintech not only makes people's daily life more convenient but also brings new opportunities for firm growth. Yet, although multiple parties in society have benefited tremendously from the development of fintech, its actual impact on FTIE remains unclear. For this purpose, we adopted a two-way fixed-effect model and considered the data of A-share-listed companies from 2011 to 2019 to analyze the impact of fintech development on FTIE in China and its associated mechanism. We found that fintech development negatively affected FTIE by increasing business risks and debt pressures through risk transmission and regulatory arbitrage, respectively. This finding remains robust after using instrumental variable tests and adopting Poisson and Tobin regression models. Furthermore, such negative impacts are higher for firms in the eastern region, nonmanufacturing firms, and state-owned enterprises. Our findings contribute significantly to the literature on technological innovation and financial regulation by shedding light on the negative impacts of the dominating fintech development on FTIE.

Does carbon emission trading policy promote the corporate technological innovation? Empirical evidence from China's high-carbon industries

Global warming can be solved with carbon trading. When carbon emissions become a commodity, it can be a powerful motivator for companies to optimize production capacity and innovate technologically. The goal of this paper is to examine the way in which China's carbon emissions trading policy (CET) influences firm technological innovation in seven pilot regions, using a sample of firms in eight high-carbon industries. We employ difference-in-difference (DID) as well as DID-based propensity score matching (PSM-DID) models to investigate the influence of China's carbon emission policy on firms' technological innovation by using 4745 observations of 749 A-share listed firms in eight high-carbon industries in mainland China from 2007 to 2021. According to the findings, China's CET policy significantly boosts firms' technological innovation, and this beneficial effect persists even after a series of robustness tests that change the policy's implementation year and the technological innovation measure. Further analysis shows that this positive effect is heterogeneous across high-carbon industries and firms with different ownership. In addition, based on the external governance perspective, we find that CET policy performs better in firms in high-carbon industries with a sizable portion of ownership held by institutional investors. This study suggests the effectiveness of CET policy in promoting firms' technological innovation, confirms empirical evidence for Porter's hypothesis, and provides a basis for Chinese firms to achieve their emission reduction targets by improving technological innovation.

Technical founders, digital transformation and corporate technological innovation: empirical evidence from listed companies in China’s STAR market

AbstractTechnology entrepreneurship and corporate innovation are important for the development of indigenous innovation. In the digital age, founders are subject to fundamental changes in their strategy choices, which in turn affect corporate innovation performance. This paper aims to explore the strategic choices adopted by technical founders of listed companies in China’s STAR market to reap the rewards of innovation in a digital context. Based on the annual reports of 124 listed companies in China’s STAR Market, this paper applies machine learning methods to quantify digital transformation of enterprises, and empirically analyzes the relationship between technical founders and innovation performance by constructing a moderated mediating model. Our results show that companies with technical founders are more likely to adopt digital transformation and thus show better innovation performance. In terms of heterogeneity, the empirical results demonstrate that firms with technical founders show better performance in digital transformation, followed in turn by those with business founders and academic founders. Both the positive relationship between enterprise digital transformation and innovation performance and the mediating effect of digital transformation are positively moderated by venture capital or private equity support. The findings reveal the microscopic mechanism of the role of technology-based founders on corporate innovation performance and hence have practical implications for promoting corporate digital transformation and enhancing firm technological innovation.

Technological Innovation, Risk-Taking and Firm Performance—Empirical Evidence from Chinese Listed Companies

Technological innovation can restructure the production factors of enterprises, and it is an important factor for enterprises to meet market demand, improve competitiveness, form long-term competitive advantages and obtain sustainable development. This study focuses on the practical issue of the impact of technology innovation on firm performance. Taking 1166 listed companies in China from 2012 to 2020 as research samples, this study systematically investigates and reveals the impact of technological innovation on firm performance and its internal impact mechanism. The research shows that technological innovation significantly reduces firm performance, and that conclusion holds after an endogeneity test and a robustness test. The analysis of the impact mechanism shows that risk-taking is an important transmission path of corporate technological innovation affecting corporate performance and that technological innovation reduces firm performance by improving the risk-taking capacity. Finally, a heterogeneity test regarding the firm ownership shows that technological innovation has a significantly stronger negative impact on the performance of non-state-owned enterprises than on that of state-owned enterprises. The relevant government departments and market subjects should fully understand and give attention to the impact of enterprise technological innovation on firm performance and its mechanism, which has important practical significance for standardizing and strengthening enterprise R&D management, reducing the market and technological risks of firm technological innovation and perfecting modern enterprise systems. It is helpful for firms to form a sustainable technology innovation cycle development mode.

External Environment Uncertainty, Key Resources Acquisition and Corporate Technological Innovation

Building on the resource-based theory, we investigate the impact of external environmental uncertainty on firm technological innovation taking into consideration the mediating role of key resource acquisition among this relationship. A sample of Chinese A-share listed companies from 2008 to 2019 is employed to test the proposed research model. The results provide support for the argument that the external environmental uncertainty negatively relates to the input and output of technological innovation, in which the acquisition of key resources - capital resources and information resources plays a mediating effect. We also find that corporate social capital mitigates this negative impact. Further, technological innovation of high-tech industries is more sensitive to external environment uncertainty compared with non-high-tech industries. Our results not only theoretically extend previous research by providing a new perspective to explain the mechanism of external environment uncertainty affecting corporate technological innovation, but also provide practical guidance for firms on how to effectively conduct technological innovation activities in a highly uncertain external environment.

The Impact of Fintech on Corporate Technology Innovation Based on Driving Effects, Mechanism Identification, and Heterogeneity Analysis

Fintech relies on emerging technologies such as artificial intelligence and big data to bring a new business model to the financial system; can this new change promote corporate technological innovation? To explore this question, this paper examines the possible impact mechanism of Fintech on enterprise technological innovation based on the examination of the impact of Fintech on enterprise technological innovation through a panel fixed effects model, using A-share listed enterprises in Shanghai and Shenzhen markets in China from 2011–2019, and further explores whether there is heterogeneity in this impact among enterprises with different traits. The results show that Fintech development can significantly promote firm technological innovation and that Fintech can influence firm technological innovation through two mechanisms: alleviating firm financing constraints and providing market opportunities for firms to enhance their profitability. In addition, the driving effect of Fintech on technological innovation is more pronounced in new firms, state-owned enterprises, and nonborrowed and listed firms. Based on the conclusion, it is proposed that the government should enhance certain policy support for Fintech guided by emerging technologies such as artificial intelligence, help Fintech empower the real economy, and at the same time promote the deep integration of Fintech and real enterprises, especially to strengthen the identification of Fintech for new enterprises and encourage state-owned enterprises to implement employee stock ownership system, as well as sound market construction to reduce barriers to listing of high-quality enterprises, so as to improve innovation policy effectiveness and provide a reference for the mitigation of enterprise innovation problems in the new situation.

Government Subsidies and Firm Technological Innovation Performance: An Empirical Study Based on Panel Data of High-tech Firms

Can government subsidies improve enterprises’ technological innovation performance? Based on the A-share high-tech listed enterprises in Shanghai and Shenzhen Stock Exchange from 2015 to 2019, this paper empirically tests the micro policy effect of government subsidies on innovation performance of enterprises under the background of economic transformation, and the moderating effect of regional corruption, market competition and enterprise ownership concentration on this effect. The results show that the high quality signal transmitted by government subsidies is helpful for innovative enterprises to broaden the source of innovation resources and encourage enterprises to actively carry out innovative activities. Moderate level of regional corruption will promote the government subsidy effect, too high or too low level of corruption is not conducive to enterprise innovation; The higher the degree of market competition, the weaker the promoting effect of government subsidies on enterprise innovation; Corporate ownership concentration has a U-shaped moderating effect on government subsidies and innovation performance. Therefore, to improve the independent innovation ability of enterprises, on the one hand, we should continue to strengthen the government innovation subsidy and improve the subsidy system; on the other hand, we should strictly crackdown on corruption activities and supervise the establishment and improvement of the internal control system of enterprises, so as to give full play to the effect of government subsidies.

Current status of factors affecting firms‘ technological innovation decision in Vietnam

This paper aims to reflect the current status of firm-level technological innovation in Vietnam, in particular the factors that affect technological innovation decision. The main research method employed is qualitative analysis, specifically descriptive statistics. The results show that about 31% of firms carry out product innovation and 46% of firms conduct process innovation. In addition, only about 25% of firms have trained staff and about 10% of firms have cooperated with agencies in technological innovation. The innovation environment and policies are still limited. Based on that, the authors propose policy suggestions: 1) Focus on increasing funding for firm technological innovation; 2) Strengthen the link between firms and partners; 3) Continue to promote programs and policies to support firm technological innovation.

A comparative study of the effects of different factors on firm technological innovation performance in different high-tech industries

PurposeThis paper aims to examine the different impacts of six variables on firm technological innovation performance in different high-tech industries in China. Through a comparative analysis of data about growth enterprises market board (GEM)-listed companies, this study attempts to get some conclusions, to help firms in different high-tech industries use resources more rationally and to improve technological innovation performance more effectively.Design/methodology/approachThis paper constructs semi-parametric models based on the relevant data of GEM-listed companies during 2010 to 2015 for different high-tech industries. These models can ensure that the influencing factors of firm technological innovation performance are no longer restricted to a particular aspect but can provide a comprehensive comparative analysis of the effects of factors on firm technological innovation performance in different high-tech industries.FindingsThe empirical results show that R&D expenditures have a significant positive impact on firm technological innovation performance in most high-tech industries, but not in electronic and communication equipment manufacturing industry; R&D personnel investment and government subsidies have significant positive impacts on firm technological innovation performance in knowledge-oriented industries; technology diversity has a significant positive impact on firm technological innovation performance in technology-oriented industries; the proportion of exports shows an inverted U-shaped relationship with firm technological innovation performance in electronic and communication equipment manufacturing industry, while firm size shows an inverted U-shaped relationship with firm technological innovation performance in general equipment manufacturing industry; and the effect of semi-parametric model fit is superior to the general parameters model.Originality/valueDrawing on the resource dependence perspective, this paper is the first to consider a comprehensive treatment of differential effects of internal resources (R&D personnel, R&D expenditure), external resources (government subsides) and firm characteristics (firm size, export ratio) on firm technological innovation performance in different high-tech industries in an emerging country, in particular in contrast to previous studies that have focused on a single industry or taken the type of industry as a control variable. In addition, most studies about the determinants of firm innovation performance are based on survey questionnaires, which may introduce large subjective errors. Setting the relationship between variables in advance may also introduce fit error when using a general-parameter model. Semi-parametric regression which is used in this paper is able to prevent this shortcoming effectively. When constructing a regression model, this can be exempted from the formal constraints, thus estimating data more accurately and ensuring superior fit.

Unpacking Coopetition and Innovation: Contingency Roles of Pluralistic Network Embeddedness

Extant research suggests the “double-edged sword” nature of coopetition in technology-driven industries. Specifically, coopetition may enhance value creation in firm technological innovation by providing complementary resources and learning opportunities. However, close interactions with competitors may spur competitive attacks, such as knowledge misappropriation, technological imitation, and learning races, leading to value destruction in firm innovation. The contextual conditions under which coopetition may enhance value creation or exacerbate value destruction remain unclear. In this study, we elucidate the contingency factors stemming from multiple network embeddedness of technology-driven firms, namely, centrality and structural hole spanning in a collaboration network and a knowledge network on the organizational level. We expound the direct effects of the structural characteristics of a firm’s network positions on its innovation economic value, and the moderation effects on the impacts of firm coopetition pursuits on innovation outcome. In so doing, we clarify the network-based conditions under which innovation-driven firms may augment value creation and mitigate value destruction as they pursue coopetition strategies, hence making a contribution to the current coopetition research. Additionally, our results contribute to the network pluralism literature by elucidating how doubly embedded firms achieve differential innovation outcomes under the structural influences from collaboration network and knowledge network.

Empirical research on the different innovation engine between China and US manufacturing using an improved method

ABSTRACTMost studies arrive at controversial conclusions about the relationship between firm size and technological innovation. Industrial differences and subjective model design are generally considered the primary cause. In static comparisons across industries, dynamic industrial changes are ignored, but this might lead to differing results when attempting to identify the driving forces of evolutionary change in an industrial environment. This study applies nonparametric regression methods with an expansive industry grouping to overcome the industry-difference interference and empirical model error, typifying traditional studies. First, a comparative analysis of the forces driving US and Chinese manufacturing is performed. Results indicate that US and Chinese manufacturing are in different industrial growth stages. Chinese manufacturing takes the traditional elements and R&D input as its main driving factors, which require objectively, expansive scale of enterprise, therefore showing characteristic Schumpeterian innovation. US manufacturing is driven by both R&D and non-R&D inputs; so it can maintain continuous innovation through cooperative networks under conditions of constant or contracting firm size.

Firm Voluntary Measures for Environmental Changes, Eco-Innovations and CSR: Empirical Analysis Based on Data Surveys

Despite the increased strategic importance of environmental innovation on the one hand and corporate social responsibility on the other, there are still few studies that show firm voluntary measures create a primary determinant of environmental changes. First, we clarify the meaning of voluntary measures and CSR. Second, we utilize a survey carried out in Luxemburg on firm CSR practices jointly with the Community Innovation Survey 2008 (CIS 2008). We merge them and show through the estimation of a probit model that CSR is an important factor that explains environmental innovation. Thanks to a question from CIS 2008 we can contribute to the literature by developing a new indicator measuring the scale of the positive impacts on the environment coming from the firm technological innovation capacity. A negative binomial regression enables us to estimate a significant and positive effect of CSR and firm value on this scale.

The effects of innovation sources and capabilities on product competitiveness in Hong Kong and the Pearl River Delta

It is widely recognized in the theoretical literature that firms need to use both internal and external sources of innovation to gain a competitive advantage. However, although it is assumed that internal and external sources of innovation have distinct relationships with firm capabilities, it is not clear how various innovation sources affect such capabilities, or how or to what extent such relationships affect product competitiveness. This paper examines the effect of diverse sources of innovation on a firm's technological innovation capabilities and the extent to which such capabilities mediate the improvement of product competitiveness. Based on a survey of 200 manufacturing firms in Hong Kong and the Pearl River Delta region, we identify internal departments as a major source of innovation for improving a range of firm capabilities. Acquiring disembodied technology improves learning, resource allocation and organizing capabilities, whereas acquiring embodied technology enhances learning and manufacturing capabilities. We use a hierarchical regression analysis to demonstrate that some sources of innovation, such as internal departments, can lead directly to superior product competitiveness, whereas innovations acquired through conferences and competitors contribute to competitiveness through the mediation effects of resource allocation, marketing and organizing capabilities.

A study on organizational entrepreneurship on economic growth

A B S T R A C T Today, the positive impact of entrepreneurship in the economy has been globally accepted. Entrepreneurs could provide efficient techniques to face with upcoming economic challenges. In this paper, we first investigate the effect of entrepreneurship on growth of economy over the period 2005- 2011. Then we study the impact of four factors including Gross domestic product per worker, Growth in capital per worker, New firm creation and Technological innovation intensity on economic growth. The proposed model of this paper uses ordinary least square technique to investigate the relationship between four independent variables and economic growth. The results show that gross domestic product per worker is the only variable, which is statistically meaningful when the level of significance is five percent and the impact of other three variables including growth in capital per worker, new firm creation and technological innovation intensity are not statistically meaningful. In other word, as we see a 1% increase in gross domestic product per worker we could expect 8.712% increase in economic growth.