Does ownership type matter for innovation? Evidence from China

Abstract According to the institution-based view, ownership type is a key variable affecting environment-strategy configurations. This study configures the mechanism in which ownership types (as an institutional factor) moderate the effect of innovation strategies on firms' innovation performance. An empirical analysis was conducted on Chinese hi-tech manufacturing firms, using information related to the innovation activities of 303 firms. The empirical results suggest that ownership type affects the positive relationship between three sources of innovation (internal R&D activities, partnering with alliance partners, and partnering with universities) and innovation performance, as well as the negative relationship between external contracting and innovation performance (product or process innovation). The results imply that organizations doing business in China must be aware of the business environment that they intend to enter, especially if the intention is to develop new products or innovate current business processes.

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