Title: Why are the industrial firms of emerging economies short-termistic in innovation? Industry-level evidence from Chinese manufacturing

Authors: Bin Guo; Xiaoling Chen

Addresses: School of Management, Zhejiang University, Hangzhou 310058, China. ' School of Management, Zhejiang University, Hangzhou 310058, China

Abstract: We examine the influences of intra-industry and inter-industry foreign direct investment (FDI) presence, financial constraints and technological uncertainty on the short-termism in innovation by using an industry-level panel data of Chinese large- and medium-size manufacturing enterprises during the period of 2000 to 2009. Innovation behaviour is conceptualised as a process of knowledge acquisition and knowledge creation from a learning perspective. The empirical results show that intra-industry and inter-industry FDI presence have strong influences on firms' short-termism in both knowledge acquisition and knowledge creation, while financial constraints and technological uncertainty only affect firms' short-termism in knowledge acquisition. Another interesting finding is that intra-industry FDI presence is negatively related to firms' short-termism in knowledge acquisition and positively related to firms' short-termism in knowledge creation.

Keywords: short-termism; foreign direct investment; FDI; knowledge acquisition; China; manufacturing industry; knowledge creation; industrial firms; emerging economies; intra-industry investment; inter-industry investment; financial constraints; technological uncertainty; innovation behaviour; industry-level data; panel data; large companies; small and medium-sized enterprises; SMEs; learning perspectives; technology management.

DOI: 10.1504/IJTM.2012.047247

International Journal of Technology Management, 2012 Vol.59 No.3/4, pp.273 - 299

Available online: 08 Jun 2012 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article