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Tie strength, absorptive capacity and innovation performance in Chinese manufacturing industries

Author

Listed:
  • Xueyuan Liu
  • Muzhen Shen
  • Wenjing Ding
  • Xiande Zhao

Abstract

Purpose - In innovation networks, firm innovation performance is affected by external tie strength and internal knowledge absorptive capacity. This study aims to empirically examine the path relationship between tie strength, absorptive capacity and firm innovation performance in Chinese manufacturing industries, thus enhance our understanding on the mechanism between innovation network and innovation performance. Design/methodology/approach - The authors have conducted a survey among Chinese manufacturers in four industries (textile and garment, household appliance, IT and electronics and motor vehicle assemblers) that are located in North, East, Central and South China, respectively, with a valid response from 278 manufacturers. Structural equation model is used to analyze the results. Findings - This study demonstrates that in Chinese Manufacturing industry, tie strength is positively related to innovation performance. The authors also find that absorptive capacity has a positive impact on innovation performance and it mediates the relationship between tie strength and innovation performance. Then, the authors analyze the effect of ownership, industry and sub-region, and the results show that in private firms and traditional manufacturers, and the firms located in North and Eastern China, tie strength has no direct effect on innovation outcomes, but it can influence innovation indirectly through absorptive capacity. Originality/value - This study further supports that in Chinese guanxi culture, strong ties with other innovation partners can improve the firm’s absorptive capacity and thus improve innovation performance. The results also suggest that a firm’s absorptive capacity has a significant mediating effect on the relationship between tie strength and innovation performance.

Suggested Citation

  • Xueyuan Liu & Muzhen Shen & Wenjing Ding & Xiande Zhao, 2017. "Tie strength, absorptive capacity and innovation performance in Chinese manufacturing industries," Nankai Business Review International, Emerald Group Publishing Limited, vol. 8(4), pages 475-494, November.
    • Handle: RePEc:eme:nbripp:nbri-01-2017-0002
    DOI: 10.1108/NBRI-01-2017-0002
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    Cited by:

    1. Monferrer, Diego & Moliner, Miguel Ángel & Irún, Beatriz & Estrada, Marta, 2021. "Network market and entrepreneurial orientations as facilitators of international performance in born globals. The mediating role of ambidextrous dynamic capabilities," Journal of Business Research, Elsevier, vol. 137(C), pages 430-443.
    2. Sonia Cruz-Ros & Diana L. Guerrero-Sánchez & Maria-Jose Miquel-Romero, 2021. "Absorptive capacity and its impact on innovation and performance: findings from SEM and fsQCA," Review of Managerial Science, Springer, vol. 15(2), pages 235-249, February.
    3. Yingmiao Qian & Mengjun Wang & Yang Zou & Ruoyu Jin & Ruijia Yuan & Qinge Wang, 2019. "Understanding the Double-Level Influence of Guanxi on Construction Innovation in China: The Mediating Role of Interpersonal Knowledge Sharing and the Cross-Level Moderating Role of Inter-Organizationa," Sustainability, MDPI, vol. 11(6), pages 1-19, March.

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