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Open Innovation as a Response to Constraints and Risks: Evidence from China

Author

Listed:
  • Xiaolan Fu

    (Technology & Management Centre for Development Department of International Development, University of Oxford)

  • Jizhen Li

    (Research Center for Technological Innovation, and School of Economics & Management, Tsinghua University)

  • Hongru Xiong

    (Research Center for Technological Innovation, Tsinghua University and Development Research Center of the State Council of China)

  • Henry Chesbrough

    (Haas School of Business Faculty Wing, F402 University of California)

Abstract

This paper examines the determinants of open innovation as a response to the constraints and risks of innovation that firms face in emerging economies. A recent national firm-level survey of 1,400 firms in the manufacturing sector is used as the basis of the analysis. We find that institutional, financial and knowledge/skills-related risks and constraints are all significantly associated with these firms' depth and breadth of openness in innovation. The responses, however, vary across firms of different ownership types. Foreign-invested firms appear to be most responsive and take action to widen and deepen their openness in innovation. Privately owned firms have made significant responses to market- and institution- and finance- and risk-related impediments but not to knowledge- and skills-related impediments. State-owned firms appear to be least responsive in use of open innovation. Firm size and industry specific effects also appear to have significant moderating effect on firms' responses to the various constraints. These findings are supported by an in-depth study of the Chinese semiconductor industry. © 2014 The Earth Institute at Columbia University and the Massachusetts Institute of Technology

Suggested Citation

  • Xiaolan Fu & Jizhen Li & Hongru Xiong & Henry Chesbrough, 2014. "Open Innovation as a Response to Constraints and Risks: Evidence from China," Asian Economic Papers, MIT Press, vol. 13(3), pages 30-58, Fall.
    • Handle: RePEc:tpr:asiaec:v:13:y:2014:i:3:p:30-58
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    Citations

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    Cited by:

    1. Zhu, Xiaoxuan & Xiao, Zhenxin & Dong, Maggie Chuoyan & Gu, Jibao, 2019. "The fit between firms’ open innovation and business model for new product development speed: A contingent perspective," Technovation, Elsevier, vol. 86, pages 75-85.
    2. Claudio Petti & Lauretta Rubini & Silvia Podetti, 2017. "Government Support and R&D Investment Effectiveness in Chinese SMEs: A Complex Relationship," Asian Economic Papers, MIT Press, vol. 16(1), pages 201-226, Winter/Sp.
    3. Xing Shi & Yanrui Wu & Dahai Fu & Xiumei Guo & Huaqing Wu, 2019. "Effects of National Science and Technology Programs on Innovation in Chinese Firms," Asian Economic Papers, MIT Press, vol. 18(1), pages 207-236, Winter/Sp.
    4. Obradović, Tena & Vlačić, Božidar & Dabić, Marina, 2021. "Open innovation in the manufacturing industry: A review and research agenda," Technovation, Elsevier, vol. 102(C).
    5. Nguyen, Thi Phuong Thao & Huang, Fang & Tian, Xiaowen, 2023. "Intellectual property protection need as a driver for open innovation: Empirical evidence from Vietnam," Technovation, Elsevier, vol. 123(C).
    6. Liu, Jiali & Yu, Jiang & Chen, Feng & Zhang, Yaokun & Li, Bo, 2022. "How latecomers strategically respond to global-local resources and leverage local ecosystems: Evidence from China's integrated circuit design firms," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    7. Madanaguli, Arun & Dhir, Amandeep & Talwar, Shalini & Clauss, Thomas & Kraus, Sascha & Kaur, Puneet, 2023. "Diving into the uncertainties of open innovation: A systematic review of risks to uncover pertinent typologies and unexplored horizons," Technovation, Elsevier, vol. 119(C).
    8. Dziurski Patryk & Sopińska Agnieszka, 2020. "Does industry matter? Drivers and barriers for open innovation in high-tech and non-high-tech industries—Evidence from Poland," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(4), pages 307-323, December.
    9. Yuosre F. Badir & Björn Frank & Marcel Bogers, 2020. "Employee-level open innovation in emerging markets: linking internal, external, and managerial resources," Journal of the Academy of Marketing Science, Springer, vol. 48(5), pages 891-913, September.

    More about this item

    Keywords

    innovation; emerging economy; risks; foreign-invested firms; impediments;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F00 - International Economics - - General - - - General

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