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Joint Effects of Ownership and Competition on the Relationship between Innovation and Productivity: Application of the CDM Model to the Chinese Manufacturing Sector

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  • Shi, Junguo
  • Sadowski, Bert
  • Li, Sihan
  • Nomaler, Önder

Abstract

On the basis of a rich panel data set of large- and medium-sized Chinese manufacturing enterprises, we observe that different types of firms (i.e., state-owned enterprises [SOEs], foreign-funded ownership [FFO] of firms, Hong Kong-Macau-Taiwanese [HMT] companies and privately-owned firms) exploit different stages of the innovation – productivity chain depending on the extent of market concentration. By applying a modified CDM model, this study reveals that SOEs tend to be more active in making innovative decisions and pursuing innovative investments but are less efficient in terms of innovation output and labour productivity, whereas FFO firms have relatively high labour productivity but are less active in the first three stages of the innovation – productivity chain. Market competition favours SOEs in the production of additional innovation products. Foreign firms are efficient in labour productivity if they are operating in a concentrated market. By using the metaphor of DNA, this study explains the heterogeneity among these different forms of ownership and generates several managerial implications.

Suggested Citation

  • Shi, Junguo & Sadowski, Bert & Li, Sihan & Nomaler, Önder, 2020. "Joint Effects of Ownership and Competition on the Relationship between Innovation and Productivity: Application of the CDM Model to the Chinese Manufacturing Sector," Management and Organization Review, Cambridge University Press, vol. 16(4), pages 769-789, October.
    • Handle: RePEc:cup:maorev:v:16:y:2020:i:4:p:769-789_8
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    Cited by:

    1. Muhammad Zeeshan Younas & Muhammad Iftikhar Husnain, 2022. "Role of market structure in firm-level innovation: an extended CDM model for a developing economy," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 49(1), pages 91-104, March.
    2. Yunqing Liu & Zekun Dai & Yiting Wu & Fang Da, 2023. "How the Social Relations Affect Performance in Chinese High-tech New Ventures: The Role of Legitimacy Acquisition and Symbolic Strategy," SAGE Open, , vol. 13(4), pages 21582440231, December.
    3. Zetian Cui & Yancheng Ning & Jia Song & Jun Yang, 2024. "Impact of National Innovative City Policy on Enterprise Green Technology Innovation—Mediation Role of Innovation Environment and R&D Investment," Sustainability, MDPI, vol. 16(4), pages 1-16, February.
    4. Junguo Shi & Xinyi Yuan & Bert M. Sadowski & Kou Kou & Xuhua Hu & Sihan Li & Shanshan Dou, 2022. "VAT Reform, Regional Ownership Structure, and Industrial Upgrading: Evidence From Firms in Northeast China," SAGE Open, , vol. 12(2), pages 21582440221, April.
    5. Mahrukh Aslam & Imran Shafi & Jamil Ahmad & Roberto Marcelo Alvarez & Yini Miró & Emmanuel Soriano Flores & Imran Ashraf, 2022. "An Analytical Framework for Innovation Determinants and Their Impact on Business Performance," Sustainability, MDPI, vol. 15(1), pages 1-20, December.
    6. Guo, Yan & Zhang, Haochen, 2022. "Spillovers of innovation subsidies on regional industry growth: Evidence from China," Economic Modelling, Elsevier, vol. 112(C).
    7. Wang, Nannan & Gong, Zheng & Xu, Zhuhuizi & Liu, Zhankun & Han, Yu, 2021. "A quantitative investigation of the technological innovation in large construction companies," Technology in Society, Elsevier, vol. 65(C).

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