IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v29y2014icp213-228.html
   My bibliography  Save this article

Industry association networks, innovations, and firm performance in Chinese small and medium-sized enterprises

Author

Listed:
  • Qiao, Peng-hua
  • Ju, Xiao-feng
  • Fung, Hung-Gay

Abstract

This study uses panel data analysis to examine the effects of membership in industry association networks on innovation and firm performance in Chinese small and medium-sized enterprises (SMEs) listed on the Shenzhen Stock Exchange Small and Medium-size Enterprises Board from 2007 to 2011. There are several interesting findings. First, research and development (R&D) and technology staff have a positive and significant effect on innovation at SMEs. Second, participation in industry association networks (defined as comprising business association networks and technology association networks) can improve firm innovation at Chinese SMEs. Third, innovation is found to have a positive effect on firm performance at SMEs. Finally, membership in industry association networks can improve firm efficiency and increase non-operating income but at the expense of higher management costs at SMEs. Our study has important policy implications for policymakers and SMEs in China.

Suggested Citation

  • Qiao, Peng-hua & Ju, Xiao-feng & Fung, Hung-Gay, 2014. "Industry association networks, innovations, and firm performance in Chinese small and medium-sized enterprises," China Economic Review, Elsevier, vol. 29(C), pages 213-228.
    • Handle: RePEc:eee:chieco:v:29:y:2014:i:c:p:213-228
    DOI: 10.1016/j.chieco.2014.04.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X14000376
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2014.04.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Javier Revilla DIEZ, 2002. "Metropolitan Innovation Systems: A Comparison between Barcelona, Stockholm, and Vienna," International Regional Science Review, , vol. 25(1), pages 63-85, January.
    2. Clyde Eiríkur Hull & Sandra Rothenberg, 2008. "Firm performance: the interactions of corporate social performance with innovation and industry differentiation," Strategic Management Journal, Wiley Blackwell, vol. 29(7), pages 781-789, July.
    3. Milé Terziovski, 2010. "Innovation practice and its performance implications in small and medium enterprises (SMEs) in the manufacturing sector: a resource‐based view," Strategic Management Journal, Wiley Blackwell, vol. 31(8), pages 892-902, August.
    4. Penghua Qiao & Hung-Gay Fung & Xiaofeng Ju, 2013. "Effects of Social Capital, Top Executive Attributes and R&D on Firm Value in Chinese Small and Medium-sized Enterprises," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(4), pages 79-100, July.
    5. García-Manjón, Juan V. & Romero-Merino, M. Elena, 2012. "Research, development, and firm growth. Empirical evidence from European top R&D spending firms," Research Policy, Elsevier, vol. 41(6), pages 1084-1092.
    6. Raymond Van Wijk & Justin J. P. Jansen & Marjorie A. Lyles, 2008. "Inter‐ and Intra‐Organizational Knowledge Transfer: A Meta‐Analytic Review and Assessment of its Antecedents and Consequences," Journal of Management Studies, Wiley Blackwell, vol. 45(4), pages 830-853, June.
    7. Robert M. Salomon & J. Myles Shaver, 2005. "Learning by Exporting: New Insights from Examining Firm Innovation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 431-460, June.
    8. Macdonald, Stuart, 2004. "When means become ends: considering the impact of patent strategy on innovation," Information Economics and Policy, Elsevier, vol. 16(1), pages 135-158, March.
    9. Julie M. Hite & William S. Hesterly, 2001. "The evolution of firm networks: from emergence to early growth of the firm," Strategic Management Journal, Wiley Blackwell, vol. 22(3), pages 275-286, March.
    10. Michael Lubatkin & John Florin & William S. Schulze, 2003. "A social capital model of high growth ventures," Post-Print hal-02311715, HAL.
    11. Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988. "Interindustry R&D, Rates of Return and Production in High-Tech Industries," Working Papers 88-04, C.V. Starr Center for Applied Economics, New York University.
    12. Maury, Benjamin & Pajuste, Anete, 2005. "Multiple large shareholders and firm value," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1813-1834, July.
    13. Akçomak, I. Semih & ter Weel, Bas, 2009. "Social capital, innovation and growth: Evidence from Europe," European Economic Review, Elsevier, vol. 53(5), pages 544-567, July.
    14. Wang, Yan & Yao, Yudong, 2003. "Sources of China's economic growth 1952-1999: incorporating human capital accumulation," China Economic Review, Elsevier, vol. 14(1), pages 32-52.
    15. Bernstein, Jeffrey I & Nadiri, M Ishaq, 1988. "Interindustry R&D Spillovers, Rates of Return, and Production in High-Tech Industries," American Economic Review, American Economic Association, vol. 78(2), pages 429-434, May.
    16. Michael Lubatkin & John Florin & William S. Schulze, 2003. "A social capital model of high growth ventures," Post-Print hal-02276699, HAL.
    17. GUAN, Jian Cheng & YAM, Richard C.M. & Tang, Esther P.Y. & Lau, Antonio K.W., 2009. "Innovation strategy and performance during economic transition: Evidences in Beijing, China," Research Policy, Elsevier, vol. 38(5), pages 802-812, June.
    18. Cheung Kui-yin & Lin, Ping, 2004. "Spillover effects of FDI on innovation in China: Evidence from the provincial data," China Economic Review, Elsevier, vol. 15(1), pages 25-44.
    19. Hung‐gay Fung & Qingfeng Liu & Jot Yau, 2007. "Financing Alternatives for Chinese Small and Medium Enterprises: The Case for a Small and Medium Enterprise Stock Market," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(1), pages 26-42, January.
    20. Wei-ping Wu & Alicia Leung, 2005. "Does a Micro-Macro Link Exist Between Managerial Value of Reciprocity, Social Capital and Firm Performance? The Case of SMEs in China," Asia Pacific Journal of Management, Springer, vol. 22(4), pages 445-463, December.
    21. Fang, Tony & Ge, Ying, 2012. "Unions and firm innovation in China: Synergy or strife?," China Economic Review, Elsevier, vol. 23(1), pages 170-180.
    22. Yanmei Zhu & Xinhua Wittmann & Mike Peng, 2012. "Institution-based barriers to innovation in SMEs in China," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 1131-1142, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Penghua Qiao & Anna Fung & Jianchun Miao & Hung†Gay Fung, 2017. "Powerful Chief Executive Officers and Firm Performance: Integrating Agency and Stewardship Theory," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(6), pages 100-119, November.
    2. Qiao, Penghua & Chang, Ming & Zeng, Yuping, 2024. "The influence of digitalization on SMEs’ OFDI in emerging countries," Journal of Business Research, Elsevier, vol. 177(C).
    3. Guangqin Li & Shiyu Lu & Shuai Shao & Lili Yang & Ke Zhang, 2021. "Do environmental regulations hamper small enterprises' market entry? Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 252-266, January.
    4. Zhang, Gupeng & Zhou, Jianghua, 2016. "The effects of forward and reverse engineering on firm innovation performance in the stages of technology catch-up: An empirical study of China," Technological Forecasting and Social Change, Elsevier, vol. 104(C), pages 212-222.
    5. Luo, Lianfa & Cheng, Zhiming & Ye, Qingqing & Cheng, Yanjun & Smyth, Russell & Yang, Zhiqing & Zhang, Le, 2024. "Nonmonetary awards and innovation: Evidence from winning China's Top Brand Contest," China Economic Review, Elsevier, vol. 86(C).
    6. Lantao Zhu & Xi Li & YingChuan Wang, 2021. "The Impact of Social Capital on Residents’ Supportive Attitude to Tourism Development: The Mediation Role of Perception of Justice," SAGE Open, , vol. 11(3), pages 21582440211, September.
    7. Yao, Nengzhi(Chris) & Guo, Qiaozhe & Tsinopoulos, Christos, 2022. "The bright and dark sides of institutional intermediaries: Industry associations and small-firm innovation," Research Policy, Elsevier, vol. 51(1).
    8. Shuai Wang & Fayyaz Ahmad & Yanlong Li & Nabila Abid & Abbas Ali Chandio & Abdul Rehman, 2022. "The Impact of Industrial Subsidies and Enterprise Innovation on Enterprise Performance: Evidence from Listed Chinese Manufacturing Companies," Sustainability, MDPI, vol. 14(8), pages 1-17, April.
    9. Mingwen Chen & RongJia Chen & Shiyong Zheng & Biqing Li, 2023. "Green Investment, Technological Progress, and Green Industrial Development: Implications for Sustainable Development," Sustainability, MDPI, vol. 15(4), pages 1-12, February.
    10. Li, Jiu-Jin & Fung, Hung-Gay & An, Shi, 2024. "Government venture capital funds: Balancing the impact of social and financial goals on startups," China Economic Review, Elsevier, vol. 85(C).
    11. Zhang, Dongyang & Guo, Yumei, 2019. "Financing R&D in Chinese private firms: Business associations or political connection?," Economic Modelling, Elsevier, vol. 79(C), pages 247-261.
    12. Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ & Prasanna, RPIR & Jayasundara, JMSB & Rajapakshe, PSK, 2019. "Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review," MPRA Paper 98419, University Library of Munich, Germany.
    13. Guan, JianCheng & Pang, Lanxin, 2017. "Industry specific effects on innovation performance in China," China Economic Review, Elsevier, vol. 44(C), pages 125-137.
    14. Penghua Qiao & Mengli Lv & Yuping Zeng, 2020. "R&D Intensity, Domestic Institutional Environment, and SMEs’ OFDI in Emerging Markets," Management International Review, Springer, vol. 60(6), pages 939-973, December.
    15. Dan Li & Li-Qun Wei & Qing Cao & Deqiu Chen, 2022. "Informal institutions, entrepreneurs’ political participation, and venture internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1062-1090, August.
    16. Zhaobin Liu & Yongxiang Zhang & Weiwei Deng & Jian Ma & Xia Fan, 2024. "A deep learning method for recommending university patents to industrial clusters by common technological needs mining," Scientometrics, Springer;Akadémiai Kiadó, vol. 129(6), pages 3089-3113, June.
    17. Haojun, Wang & Jiazhu, Li, 2024. "Professional experience of CEOs in industry associations and corporate green innovation-empirical evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    18. Ling-Yun He & Geng Huang, 2020. "Tariff Reduction and Environment: Evidence from CAFTA and Chinese Manufacturing Firms," Sustainability, MDPI, vol. 12(5), pages 1-25, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tatiana S. Manolova & Nancy M. Carter & Ivan M. Manev & Bojidar S. Gyoshev, 2007. "The Differential Effect of Men and Women Entrepreneurs’ Human Capital and Networking on Growth Expectancies in Bulgaria," Entrepreneurship Theory and Practice, , vol. 31(3), pages 407-426, May.
    2. Veland Ramadani & Hyrije Abazi-Alili & Léo-Paul Dana & Gadaf Rexhepi & Sadudin Ibraimi, 2017. "The impact of knowledge spillovers and innovation on firm-performance: findings from the Balkans countries," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 299-325, March.
    3. Jing Zhang & Vangelis Souitaris & Pek–hooi Soh & Poh–kam Wong, 2008. "A Contingent Model of Network Utilization in Early Financing of Technology Ventures," Entrepreneurship Theory and Practice, , vol. 32(4), pages 593-613, July.
    4. Rodrigo-Alarcón, Job & García-Villaverde, Pedro M. & Ruiz-Ortega, María J. & Parra-Requena, Gloria, 2018. "From social capital to entrepreneurial orientation: The mediating role of dynamic capabilities," European Management Journal, Elsevier, vol. 36(2), pages 195-209.
    5. Lu, Feifei & Zhu, Zhu & Zhu, Lina & Gao, Hao, 2022. "Political tie hot potato: The contingent effect of China's anti-corruption policy on cash and innovation," Research Policy, Elsevier, vol. 51(4).
    6. Howell, Anthony, 2018. "Innovation and Firm Performance in the People’s Republic of China: A Structural Approach with Spillovers," ADBI Working Papers 805, Asian Development Bank Institute.
    7. Stam, Wouter & Arzlanian, Souren & Elfring, Tom, 2014. "Social capital of entrepreneurs and small firm performance: A meta-analysis of contextual and methodological moderators," Journal of Business Venturing, Elsevier, vol. 29(1), pages 152-173.
    8. Emma Su & Michael Carney, 2013. "Can China’s family firms create intellectual capital?," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 657-675, September.
    9. Shameen Prashantham & Charles Dhanaraj, 2010. "The Dynamic Influence of Social Capital on the International Growth of New Ventures," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 967-994, September.
    10. Cowan, Robin & Sanditov, Bulat & Weehuizen, Rifka, 2011. "Productivity effects of innovation, stress and social relations," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 165-182, August.
    11. Heinrichs, Simon & Walter, Sascha, 2013. "Don’t Step Into Your Parent’s Shoes – How Exploitation and Exploration Affect Spin-out Growth," EconStor Preprints 68591, ZBW - Leibniz Information Centre for Economics.
    12. Ko, Eun-Jeong & McKelvie, Alexander, 2018. "Signaling for more money: The roles of founders' human capital and investor prominence in resource acquisition across different stages of firm development," Journal of Business Venturing, Elsevier, vol. 33(4), pages 438-454.
    13. Shepherd, Dean A. & Sattari, Rose & Patzelt, Holger, 2022. "A social model of opportunity development: Building and engaging communities of inquiry," Journal of Business Venturing, Elsevier, vol. 37(1).
    14. Devarakonda, Ramakrishna & Reuer, Jeffrey J. & Tadikonda, Harsha, 2022. "Founder social capital and value appropriation in R&D alliance agreements," Research Policy, Elsevier, vol. 51(4).
    15. Penghua Qiao & Hung-Gay Fung & Xiaofeng Ju, 2013. "Effects of Social Capital, Top Executive Attributes and R&D on Firm Value in Chinese Small and Medium-sized Enterprises," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(4), pages 79-100, July.
    16. Walter, Sascha & Heinrichs, Simon & Walter, Achim, 2013. "Hostile Parent Firms and Child Firm Performance," EconStor Preprints 68592, ZBW - Leibniz Information Centre for Economics.
    17. Wu, Shang-Ho & Lin, Feng-Jyh & Perng, Chyuan, 2022. "The affecting factors of small and medium enterprise performance 11The authors thank Kunhuang Huarng, National taipei University of Bussiness, and Fang-Yi Lo, Feng Chia University for their careful re," Journal of Business Research, Elsevier, vol. 143(C), pages 94-104.
    18. Sara Jonsson & Jessica Lindbergh, 2013. "The Development of Social Capital and Financing of Entrepreneurial Firms: From Financial Bootstrapping to Bank Funding," Entrepreneurship Theory and Practice, , vol. 37(4), pages 661-686, July.
    19. Fernhaber, Stephanie A. & Li, Dan, 2013. "International exposure through network relationships: Implications for new venture internationalization," Journal of Business Venturing, Elsevier, vol. 28(2), pages 316-334.
    20. Jack, Sarah L., 2010. "Approaches to studying networks: Implications and outcomes," Journal of Business Venturing, Elsevier, vol. 25(1), pages 120-137, January.

    More about this item

    Keywords

    Firm performance; Industry association networks; Innovations; Small and medium-sized enterprises;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:29:y:2014:i:c:p:213-228. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.