Academic collaborations and firm innovation performance in China: The role of region-specific institutions

Abstract

Although prior research has highlighted the importance of academic collaborations in enhancing firms' innovation performance, it has largely focused on developed countries. As a result, it remains unclear how academic collaborations influence innovation in emerging countries, which differ fundamentally in their institutional environment. We contribute to this literature by examining how collaborations with universities and research institutes influence the ability of Chinese emerging market enterprises (EMEs) to develop innovations. Our analysis challenges the assumption of institutional homogeneity within a given country, showing that institutions evolve in different ways across sub-national Chinese regions. This uneven institutional evolution affects the enforcement of intellectual property rights (IPR), the level of international openness, the quality of universities and research institutes across regions and, consequently, how much Chinese EMEs benefit from academic collaborations.Our findings reveal that sub-national institutional variations have a profound impact on the relationship between academic collaborations and firms' innovation performance, show that some established assumptions are not valid in emerging countries such as China, and offer insights into how EMEs enhance their innovation performance.

Internationalization and innovation performance of emerging market enterprises: The role of host-country institutional development

“…In contrast, firms with inadequate capabilities are less capable of responding to and exploiting such host-country institutional conditions (Makino et al, 2002), which hinders their ability to innovate. Similarly, universities (key components of a country's innovation system) in developed markets provide a pool of knowledge and specialized labor that constitutes a crucial element of intellectual human capital (Kafouros et al, 2014). Although collaboration with universities enables firms to lower search costs, acquire scientific talent and knowledge (Cohen, Nelson & Walsh, 2002), EMEs with weak absorptive capacity are not able to exploit such advantages and develop their innovation capabilities.…”

“…Our results open up avenues for future research to explore in more detail how (e.g., identify which mechanisms enable reverse knowledge transfers and what is the optimum level of geographic diversification before costs outweigh the benefits) the level of institutional development of a host-country affects internationalized firms' innovation performance back home. Such understanding can offer a new explanation for the sources of competitive advantages enabling EMEs to innovate and compete with their advanced rivals on a home and global scale (Kafouros, Wang, Piperopoulos & Zhang, 2014).…”

The spatial configuration of innovation networks in China

“…In the case of China, the government has a habitual idiosyncrasy to strengthen the innovation relation between firms and knowledge partners, which normally helps firms to transform knowledge into commercially successful products (Kafouros et al 2015). Moreover, political priorities are more important than economic factors in the location of cooperative choices: given the prevalence of administrative protectionism in China, involving an inward-looking orientation of governments to protect local and/or provincial actors with the aim of maximizing intraadministrative-district benefits, local or provincial collaboration is usually favored and promoted by governments (Scherngell and Hu 2011;Andersson et al 2014).…”

“…This transition is fueled by public and private investment in education and by increasing inputs into science, technology and R&D . Meanwhile, in the case of China, the ongoing innovation process allows the coexistence of a specific variety of actors, such as public R&D institutes, universities, state-owned and private firms et al Little attention, however, has been paid to the great differences in China-specific context peculiarity (Hu and Lin 2013;Kafouros et al 2015). Firstly, the Chinese government is actively involved in innovation activities not only in finance and other types of support, but also as an important factor influencing the trend of the network configuration, for example with regard to the types of innovation activities carried out and partners chosen for innovation (Liefner and Zeng 2008;Hu and Lin 2013;Liefner and Jessberger 2016).…”

Competitive Advantage: Mediator of Diversification and Performance

“…Every company both product and service, is truly operating with the final objective to get the optimum of company performance [1]. Those cases become a task for Chief Executive Officer (CEO) to ensure shareholders.…”