An Institutional-Based View of Innovation — An Explorative Comparison of Business Groups in China and India

Abstract

The aim of this explorative study is to compare the innovation performance of business groups in China and India in order to identify their distinctive local innovation dynamics. Data collection mainly relied on two sources: The world's 142 countries ranked by the Global Innovation Index Report (2013) which provides information about the countries' institutional settings and the Joint Research Centre Database listing the world's top firms ranked by their investments in Research and Development from which we gathered information about the business groups. From the findings, it emerges that not only that China overperforms India in relation to all the Innovation Indexes but that their distinctive institutional environments tend to favour very different dynamics of innovation. More precisely, while China's regulatory environment tends to support a more conservative approach of business groups towards investments in traditional sectors, India's lack of infrastructures coupled by a more efficient regulatory environment tend to support more resourceful and creative approach. These different approaches also shape the geographical distribution of business groups' innovation performance in the two countries.

Technological Innovation Research in China and India: A Bibliometric Analysis for the Period 1991–2015

“…A few studies compare China and India. Vecchi, Della Piana, and Vivacqua (2015) show that China far outperforms India on several measures of innovation, but also highlight interesting differences between the two countries in policy environments that tend to favor a conservative approach among Chinese businesses, but a more resourceful and creative approach among Indian counterparts. Plechero and Chaminade (2013) analyze data on Chinese and Indian firms to present three routes to globalization of innovations from these firms; namely, global exploitation of innovation, global sourcing of technology, and global research collaboration.…”

Institutional varieties, governance quality, and firm‐level innovation in emerging economies: Case of India

“…It has been argued that governance quality impacts innovation, depending on the extent to which it acts as a facilitator or a barrier (Boudreaux, 2017; Vecchi et al., 2015). Properly designed institutions can stimulate innovative behaviors, while weak institutions can have the opposite effect (Digdowiseiso & Sugiyanto, 2021; Iddawela et al., 2021; Rodríguez‐Pose & Zhang, 2019, 2020; Tebaldi & Elmslie, 2013).…”

“…Examples of recent studies include Digdowiseiso and Sugiyanto (2021) on Indonesia, Iddawela et al (2021) on Africa, and Fan et al (2013), Rodríguez-Pose and Zhang (2019), and Rodríguez-Pose and Zhang (2020) on China. These studies point to the need for a deeper understanding of how contextual varieties in emerging economies, particularly in single-economy contexts, influence firm-level innovation and the extent to which findings from developed economies apply to developing economies (Rodríguez-Pose & Zhang, 2020;Vecchi et al, 2015). Thus, there is a gap in the literature regarding our understanding of the impact of institutional varieties on firm-level innovation within a single developing country (Fainshmidt et al, 2018).…”