Innovation Input Research Articles

How Does Corporate Innovation Affect Sustainable Business Investment?

This study examines the impact of corporate innovation on sustainable business investments of companies listed on the Korea exchange from 2011 to 2019. To this end, our study applies Hennessy’s investment model, which presents the relationship between corporate investment and Tobin’s mean Q in a probabilistic space. We find evidence of a positive relationship between corporate investment and Tobin’s average Q. Greater corporate growth opportunities lead to greater business investments, whereas the expected recovery ratio of debt capital has a negative relationship with corporate investments. The innovation performance variable is positively associated with the investments. Our results are suggestive of business investments being determined by investment outcomes, rather than the financial resource inputs for corporate innovation. Our study holds significance not only in the academic dimension, but also in policymaking. Since corporate growth is the outcome of corporate investments, the government may establish and implement economic policies that induce such investments.

Regional production restriction policy and firms’ green transition: Evidence from Beijing-Tianjin-Hebei region

Taking the regional production restriction policy in the Beijing-Tianjin-Hebei region and surrounding areas (BTH2+26) -- Chinese off-peak production (COPP) policy in heating season from 2017 -- as a quasi-natural experiment, this paper adopts the DID method to explore how the COPP policy impacts firms' green transition from the dual perspective of pollutant emissions reduction and efficiency gains and its internal mechanism. The results show that: (1) The COPP policy can significantly reduce air pollutant emissions without decreasing the TFP of Chinese heavy-polluting listed companies in BTH2+26. (2) Mechanism analysis find that the COPP policy can achieve firms’ green transition that combined emission reduction and efficiency gains, which is due to the promotion effect of technological innovation activities and the reduction effect of environmental costs. (3) Further analysis shows that the COPP policy on the innovation output ability of Chinese heavy-polluting companies in BTH2+26 is greater than that on the innovation input ability. (4) Heterogeneity analysis shows that the COPP policy has a more significant promoting effect on the green transition of private enterprises. Our paper can provide empirical evidence and policy recommendation for the Chinese government to promote pollution control in specific regions.

Do Innovative Provincial Policies Promote the Optimization of Regional Innovation Ecosystems?

Innovative provinces are essential to innovative countries and robust support for constructing national and regional innovation systems. Based on the panel data of 28 provinces from 2016 to 2019, this paper builds a regional innovation ecosystem performance evaluation system from five dimensions: innovation subject, innovation environment, innovation resource, resource flow, and interaction intermediaries. The index weighting is carried out using the principal component analysis method, and the innovation ecosystem performance of various provinces is evaluated and analyzed to determine the regional distribution status of innovation ecosystem performance. Based on a multi-period difference-in-differences model, this paper empirically tests the impact of innovative provincial policies on the innovation ecosystem performance of each region in the former innovation development stage. The results show that innovative provincial policies significantly positively impact the regional innovation ecosystems, which are multi-dimensional, long-term, and stable. The three secondary indicators, including ecological composition, resource input, and circulation flow, show a positive impact. Further research reveals that the main pathways of the effects are promoting the expansion of innovation inputs and the increase of interaction intermediaries among innovation subjects. Finally, combining the contents and impact of the previous innovative provincial policies, this paper puts forward corresponding thoughts and suggestions for the next phase of regional pilot-type innovation policies.

Digitalization of the Business Environment and Innovation Efficiency of Chinese ICT Firms

This study investigates how the digital business environment affects firms' innovation input variables. It was discovered that digitization leads to ongoing corporate environment optimization, which improves the effectiveness of innovation. One of the institutional environment factors, digitalization, increases the redundancy of government subsidies on businesses' investments in innovation. It also helps to eliminate duplication in innovation investment through the financial environment and the protection of legal rights. With increasing marketization in the informal institutional framework, the degree of R&D investment redundancy lowers while R&D human resource investment redundancy grows. Digitization not only lowers the grade of innovation, but it also has a negative association with the duplicate nature of commercial R&D investments. The authors' research combines institutional environment theory and digital development to establish a new empirical foundation for corporate development in order to boost innovation efficiency.

Can the green credit policy reduce carbon emission intensity of “high-polluting and high-energy-consuming” enterprises? Insight from a quasi-natural experiment in China

Previous studies have examined the effect of green credit policy (GCP) on innovation, the environment, and corporate performance. However, few studies have focused on GCP's impact on carbon reduction of high-polluting and high-energy-consuming (“two high”) enterprises. Based on millions of unbalanced panel data from the China Taxation Survey database from 2009 to 2016, this study considers the most acclaimed GCP (“Green Credit Guideline” in 2012) as a quasi-natural experiment and adopts a difference-in-difference (DID) method along with interactive fixed effects to study the impact of GCP on the carbon emission intensity of “two high” enterprises. In general, we find that GCP significantly reduces the carbon emission intensity of “two high” enterprises. This effect is achieved by optimizing the energy structure, promoting technology transformation, and increasing the intensity of innovation input. A heterogeneous analysis shows that the GCP has a significant suppression effect on “two high” enterprises in eastern and western regions, although its impact is less evident in central areas. Moreover, it shows that non-state-owned, unsubsidized, medium-scale, and large-scale “two high” enterprises are more significantly negatively impacted by the GCP. Finally, to further address the endogeneity problem, the propensity score matching–difference-in-difference (PSM-DID) estimation is conducted and pragmatic policy implications are proposed to improve the development and effectiveness of the GCP.

Data-Driven Evaluation of Regional Innovation Capability

Regional innovation capability is considered an important driving force for the sustainable and high-quality development of regional economy. Therefore, data-driven evaluation method of regional innovation capability is proposed. First, the article collects regional innovation development statistics; second, min-max standardization method is used for dimensionless data processing, and anti-entropy method is used to calculate index weight; third, a composite system synergy degree model for objective and quantitative evaluation is built; finally, using Anhui Province as an example, the feasibility of the method was verified . The results indicate that the order and synergy degree of the innovation input and innovation output subsystems of Anhui Province have shown an upward trend from 2010 to 2019. However, innovation output has not been synchronized with innovation input. Therefore, suggestions for improving Anhui's regional innovation capability are proposed. This study provides theoretical and methodological support for evaluating and optimizing regional innovation capability.

External environment uncertainty, key resources acquisition, and corporate technological innovation

AbstractThis study investigates the impact of external environmental uncertainty on technological innovation from the perspective of key resource acquisition. Using data from A‐share listed companies in Shanghai and Shenzhen stock markets from 2008 to 2019, we empirically test the relationship between external environmental uncertainty faced by firms and technological innovation input and output. Our findings reveal that external environmental uncertainty has a negative impact on the input and output of corporate technological innovation. In addition, key resource acquisition, namely, capital resource acquisition and information resource acquisition, plays a mediating role in this relationship. As an asset for obtaining resources, corporate social capital is a crucial means for firms to obtain external resources. This study further incorporates corporate social capital into the analysis, which shows that corporate social capital plays a positive moderating role in the impact of external environmental uncertainty on corporate technological innovation. Furthermore, research shows that compared with nonhigh‐tech industry firms, the technological innovation of high‐tech industry firms is more sensitive to external environmental uncertainty.

The Impact of Housing Prices on Regional Innovation Capacity: Evidence from China

Enhancing regional innovation capacity has become a realistic need to promote high-quality economic development. At present, there is no consensus on how housing prices affect regional innovation capacity. Papers in the existing literature frequently regard regional innovation capacity as a “black box”. Little consideration has been given to the internal processes of this black box as well as to the mechanisms of housing prices affecting regional innovation capacity. In order to crack this black box, regional innovation can be divided into three stages: innovation input, innovation output, and innovation achievement transformation based on innovation value-chain theory. In this paper, an analytical framework of housing prices affecting regional innovation capacity was constructed using the relevant theories. An empirical test was conducted using Chinese provincial panel data from 2004 to 2019. It was found that housing prices have negative impacts on innovation input, innovation output, and innovation achievement transformation capacity. These three impact paths are influenced by the three mechanisms of real-estate investment, human-capital level, and regional consumption capacity, and the impacts are heterogeneous among different regions in China. These findings contribute to our understanding of the relationship between housing prices and regional innovation capacity and provide useful references for enhancing regional innovation capacity.

Corporate innovation and analysts’ estimates of the cost of equity: Evidence from China

We examine the effect of corporate innovation input and output on analysts' estimates of the cost of equity based on data from public listed Chinese companies between 2007 and 2017. Analysts' estimates of the cost of equity significantly increase with corporate innovation input, whereas their estimates decrease with corporate innovation output, as indicated by this research. The results of additional analysis suggest that the role of corporate innovation input in increasing the estimates of the cost of equity is more significant with an increase in environmental uncertainty and negatively mitigated by strong survival ability. However, the role of corporate innovation output in decreasing analysts' estimates of the cost of equity is not significantly moderated by environmental uncertainty or corporate survival ability. Furthermore, we find that analysts consider financial constraints and information asymmetry when estimating the cost of equity. On this basis, the present study confirms that investors are significantly responsive to analysts’ estimates of the cost of equity during investment decision making.

Strategic or substantive green innovation: How do non-green firms respond to green credit policy?

How does a green credit policy shape non-green firms' green innovation behavior? Previous literature shows that the green credit policy stimulates the quantity of green innovation but is less focused on its quality. Using the enforcement of the Green Credit Guidelines (GCG) in China as a natural experiment, we investigate the influence of the green credit policy on different types of green innovation (i.e., high and low quality). Consistent with the greenwashing hypothesis, we find that non-green firms strategically increase low-quality green innovations but not high-quality ones after the enforcement of the GCG. Additionally, we show that non-green firms are more likely to increase their patenting activities rather than innovation inputs to boost green patents after the enforcement of the GCG. Our study reveals the unintended consequences of the green credit policy and sheds light on non-green firms' strategic green innovation behavior.

RETRACTED: Green innovations and patents in OECD countries

Green transition is important for the economics of the OECD countries and their transition to cleaner production. This paper estimates a knowledge production function consisting of a system of innovation inputs, innovation outputs, and productivity with feedback effect from productivity on innovation investments. The model accounts for productivity shock, endogeneity of inputs, and their simultaneity and interdependence. Productivity shock is a latent unobserved component that is specified in terms of observable factors. The model is estimated using Bayesian methods organized around Marco Chain Sequential Monte Carlo iteration techniques also known as Particle Filtering. For the empirical part, the paper uses balanced panel data covering 27 OECD countries' green innovation and patents activities observed during the period 1990–2018. Our empirical results show evidence of significant heterogeneity in productivity and its relationship with its identified determinants. The paper also discusses the implications of these results for OECD countries’ green growth strategies.

Modeling hemp as an innovative input: an application of the diffusion of innovations in a sample of hemp aware consumers

AbstractAfter decades of absence, the federal legalization of hemp in the U.S. positions the crop as an innovative, plant-based input for conventional products. Through an application of the diffusion of innovations theory, this study responds to identified research needs made by hemp stakeholders and the existing literature by modeling the influence of innovation characteristics on propensity to use hemp products among Vermont consumers. Findings reveal that attributes associated with relative advantage and trialability significantly influence propensity to use at least one type of hemp product, as well as use multiple types of hemp products. This highlights particularly salient points for hemp stakeholders engaged in the marketing and communication of hemp products. Findings contribute to informed strategy creation for producers, institutions, and other stakeholders operating in this nascent industry, where data and research continue to be limited.

Regional Fintech Development and Enterprise Digital Transformation: Theoretical and Mechanism Analysis

In the context of the new round of technological revolution and industrial revolution, fintech has increasingly become the core driving force of economic development. The development of regional fintech is profoundly affecting the policy arrangements of relevant enterprises. Digital transformation is what enterprises must strive to achieve after entering the current data era, which will help enterprises to enhance their core competitiveness and brave the wind and waves in the digital era. Therefore, in this paper, the panel data of A-share listed companies in Shanghai and Shenzhen stock markets from 2011 to 2018 were used as the original samples, word frequency statistics related to enterprise digital transformation in the annual reports of listed companies were used to measure the degree of enterprise digital transformation, and the influence of regional fintech development on enterprise digital transformation and its mechanism were analyzed by measuring the level of regional fintech development. The study found that the development level of local fintech significantly has promoted the digital transformation of enterprises in their jurisdictions. Heterogeneity analysis shows that development of fintech has significant regional heterogeneity on the investment efficiency of enterprises. Its influence is concentrated in the eastern and central regions, but has no significant impact on enterprises in the western region. Mechanism analysis shows that the development of regional fintech alleviates the degree of information asymmetry of enterprises, increases the innovation input of enterprises, affects the strategic decision of sustainable innovation of enterprises, and thus promotes the digital transformation of enterprises. This paper discusses the influence of regional fintech development on the digital transformation of enterprises, analyzes the reasons from multiple perspectives, and provides important enlightenment for promoting the development of regional fintech and promoting the digital transformation of enterprises.

How can China's medical manufacturing listed firms improve their technological innovation efficiency? An analysis based on a three-stage DEA model and corporate governance configurations

China's medical manufacturing industry is in a critical stage of transition to independent innovation. The government should create a business environment that is conducive to the development of the industry, and firms need to accurately identify obstacles to their innovation governance. However, the relationship between corporate governance (CG) and innovation efficiency remains unclear. Based on the CG configuration research framework, this study analyzes, using a three-stage data envelopment analysis (DEA) model and panel data fuzzy-set qualitative comparative analysis (fsQCA), the relationship between the internal governance and technological innovation efficiency (TIE) of China's medical manufacturing listed firms (CMMLFs) with the consideration of the impact of environmental parameters on innovation performance. The results show that (1) government support and medical spending among environmental factors create innovation input redundancy, and education investment and industrial competition promote innovation efficiency; and (2) the high TIE of firms is the outcome of multiple internal mechanisms, and there are five possible paths conducive to improving TIE and two mainstream, stable configurations for high technical efficiency. Our study systematically analyzes the external and internal organizational factors as two situational factors for CG and provides a reference for decision-making to further promote the efficient innovation of medical manufacturing firms.

Sustainability-oriented innovation system and economic stability of the innovative countries.

Novelcoronavirus-19 has created a challenging situation for developed as well as developing countries to sustain economic stability. There are a lot of controversies for policymakers to formulate an effective policy for reviving economic stability and minimizing the economic effects of this pandemic. The present study focuses on the internal mechanism of the Sustainability Oriented Innovation System and its subsequent effects on economic stability in most innovative economies. For empirical analysis of the most innovative countries (12 countries) high-income, middle-income, low-income, and lower-middle-income countries are selected. The Sustainability Oriented Innovation System is represented through the innovation input index and innovation output index. Economic stability is measured through the GDP growth rate of respective countries. A set of panel data was developed for the period of 11 years and Fixed Effect Methods were used to ascertain the empirical findings. The outcomes indicate that innovation is the main force of economic stability. The study's results are important to policymakers to promote, stimulate and support economic stability through their strategies. Future studies may focus on the effects of the Sustainability Oriented Innovation System on economic stability in regional blocks like the EU, ASEAN, and G-20 countries.

Study on the Influence Mechanism and Adjustment Path of Climate Risk on China’s High-Quality Economic Development

The quantitative analysis of the economic impact of climate risk is an effective means of understanding and taking reasonable preventative steps in relation to the climate-related economic crisis. This paper takes panel data from China’s 31 provinces for 2009 to 2021, combined with a regulating intermediary effect model, to determine the climate risk faced in China and its influence mechanism on high-quality economic development, in an attempt to determine how to adjust the path. The results show that, first, when using a different regression model, we see that climate risks pose a significantly inhibiting effect on high-quality economic development in China. Secondly, when the climate risk increases by 1%, high-quality economic development drops by 0.0115%. When the climate risk increases by 1%, this leads to a 14.9672% increase in the likelihood of natural disasters, causing high-quality economic development to be indirectly reduced by 0.1300%. Thirdly, green innovation has a multidimensional effect; it can both directly and indirectly impact the negative effects of inhibition, and indirect adjustment has a greater effect than direct adjustment. Such regulation has a greater effect on the input than on the output. Therefore, we should seek to more accurately understand the dangers of climate risk, effectively improve the five aspects of development, and strengthen the input of green innovation and thus the output of high-quality economic development in China.

Does digitization drive corporate social responsibility?

This study investigates the effect of firm-level digitization on corporate social responsibility (CSR) performance. Using a sample of Chinese A-share listed companies from 2010 to 2020 and a textual data mining approach, we find that digitization is positively associated with CSR performance with multiple tests suggesting that this relationship is causal. The study also finds that firm-level digitization promotes CSR by improving innovation inputs and outputs, stimulating innovation, and improving innovation capacity. The findings are more prominent for firms with lower financing constraints, larger sizes, and higher asset cash recovery rates.

Fintech, strategic incentives and investment to human capital, and MSEs innovation

Using a nationally representative micro and small enterprises (MSEs) survey data and Digital Financial Inclusion Index in China, we empirically study whether and how fintech impacts the innovation of MSEs. We find that the development of fintech significantly increases the probability of engaging in innovation activities, and promotes MSEs innovation input and output. The mechanisms lie in that fintech promotes long-term strategic incentives and investment to human capital of MSEs, including choosing promotion and stock as incentives instead of gifts or trips, recruiting more university graduate students, increasing training fees and technician incomes. In the heterogeneity analysis, we find that fintech has a greater impact on those MSEs which are without government subsidies and with lower technical level, higher CEO education level. Further analysis shows that coverage breadth of fintech has greater impact on MSEs innovation. This paper enriches the micro mechanisms of fintech impacts on MSEs innovation, and provides a policy basis for releasing the innovation vitality of MSEs.

The impact of government support on firm innovation: Evidence from China

AbstractThis paper systematically analyzes the relationship between government support and private enterprise innovation. A firm‐level proxy for government support is derived based on Chinese context. Specifically, we explore whether and how government subsidies affect private firms' innovation output. We find that government subsidies can promote private enterprise innovation, and this impact will be further strengthened when firms face high level of financing constraints and when large shareholders pledge their equities. However, this impact will be weakened in regions with high marketization degree and good information environment. Further analysis shows that government support can have a positive impact on corporate innovation by increasing private firms' innovation input and reducing financing costs. Our study sheds new light on the role of government support by investigating the boundary conditions and exploring the impact channel of its effect. Also, this paper fills a gap in the research on the role of government support and the situational research by putting this issue in Chinese context.

Identification and driving mechanism of the industrial land use transition in China

With China's rapid advancements in urbanization and industrialization, accurately identifying the stages and driving factors of industrial land use transition (ILUT) can help in the optimization of land resource allocation and in the improvement of resource usage efficiency. Based on the ILUT connotations, an index using dominant morphologies expressed by visible features and recessive morphologies expressed by invisible features is constructed. Moving t-test and random forest model are applied to identify the time points and critical drivers of ILUT in China from 2003 to 2018. The results reveal that 2011 is the point of ILUT in China, transforming from a high-speed development mode with rapid expansion and efficiency orientation to a high-quality model with intensive utilization and green development. By region, the eastern region has realized ILUT, whereas the northeastern region has not yet transformed. Additionally, the central region has realized the dominant transition, and the western region has realized the recessive transition. ILUT is the result of internal coupling and external driving. The external drivers of dominant transition are mainly high-quality labor in the socioeconomic dimension and natural factors. The critical drivers of recessive transition include innovation input in the socioeconomic dimension and environmental regulation. The key drivers vary across regions due to the different ILUT stages. These results are invaluable for elucidating the ILUT development trajectory in China, providing a reference for relevant policymakers to formulate industrial land use policies.