【Speaker】Kevin Zhou, Professor of IB/Strategy, University of Hong Kong
【Title】State Ownership and Product Innovation in China: An Integrated View of Efficiency and Legitimacy
【Time】Thursday, April 24, 10:30-12:00
【Location】Room 301, Weilun Building
【Language】English
【Organizer】Department of Innovation, Entrepreneurship and Strategy
ABSTRACT
Does state ownership benefit or impede product innovation? Extant studies offer contradicting perspectives and inconsistent empirical findings regarding this issue.
This study develops an integrated view of efficiency and legitimacy and proposes that whereas state ownership enables a firm to gain legitimacy and obtain scarce resources, the agency problem makes the firm less efficient in resource utilization.
The results of panel data from 32,063 Chinese manufacturing firms during the period 2001–2007 show that state ownership positively affects a firm’s R&D intensity, and this positive effect grows stronger when institutional development is higher.
However, state ownership weakens the effect of R&D intensity on new product output,and this negative effect diminishes when industrial competition is high, as well as for start-ups. We discuss the implications of these findings for studies of state ownership and product innovation in emerging economies.
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