Formal and Informal Institutional Constraints on Firm Innovative Performance

Cuifen WENG, Xuanye LI, Hongyan YANG, Ting REN

Research output: Journal PublicationsJournal Article (refereed)

Abstract

We study the impact of formal and informal institutional constraints on firm innovation, using 2012 World Bank Enterprise Survey data in China. We propose a framework identifying both the degree of innovative performance and innovator type of the firm. Our analysis shows that (1) constraints of formal governmental system positively associate with firm innovative performance, making firms more likely to be innovators than non-innovators; (2) constraints of legal system make firms more likely to be imitators than innovators; (3) formal financial constraints negatively associate with firm innovative performance and make firms more likely to be non-innovators than innovators; (4) prevalence of briberies make firms more likely to be either non-innovators or less-effective innovators than innovators. Our study enriches institutional theory and innovation research by building a framework that encompasses multiple dimensions of formal and informal institutional constraints and two levels of innovative performance, and offers deeper understanding of innovative performance of small and medium firms in transition economies like China.
Original languageEnglish
Pages (from-to)17441
JournalAcademy of Management Annual Meeting Proceedings
Volume2019
Issue number1
DOIs
Publication statusPublished - 1 Aug 2019

Fingerprint

Innovators
Institutional constraints
Innovative performance
China
Innovation
World Bank
Institutional innovation
Institutional theory
Survey data
Legal system
Transition economies
Financial constraints

Cite this

@article{ae05f6ccdafe409bb9b627c24bd3a4de,
title = "Formal and Informal Institutional Constraints on Firm Innovative Performance",
abstract = "We study the impact of formal and informal institutional constraints on firm innovation, using 2012 World Bank Enterprise Survey data in China. We propose a framework identifying both the degree of innovative performance and innovator type of the firm. Our analysis shows that (1) constraints of formal governmental system positively associate with firm innovative performance, making firms more likely to be innovators than non-innovators; (2) constraints of legal system make firms more likely to be imitators than innovators; (3) formal financial constraints negatively associate with firm innovative performance and make firms more likely to be non-innovators than innovators; (4) prevalence of briberies make firms more likely to be either non-innovators or less-effective innovators than innovators. Our study enriches institutional theory and innovation research by building a framework that encompasses multiple dimensions of formal and informal institutional constraints and two levels of innovative performance, and offers deeper understanding of innovative performance of small and medium firms in transition economies like China.",
author = "Cuifen WENG and Xuanye LI and Hongyan YANG and Ting REN",
year = "2019",
month = "8",
day = "1",
doi = "10.5465/AMBPP.2019.17441abstract",
language = "English",
volume = "2019",
pages = "17441",
journal = "Academy of Management Annual Meeting Proceedings",
issn = "0065-0668",
number = "1",

}

Formal and Informal Institutional Constraints on Firm Innovative Performance. / WENG, Cuifen; LI, Xuanye; YANG, Hongyan; REN, Ting.

In: Academy of Management Annual Meeting Proceedings, Vol. 2019, No. 1, 01.08.2019, p. 17441.

Research output: Journal PublicationsJournal Article (refereed)

TY - JOUR

T1 - Formal and Informal Institutional Constraints on Firm Innovative Performance

AU - WENG, Cuifen

AU - LI, Xuanye

AU - YANG, Hongyan

AU - REN, Ting

PY - 2019/8/1

Y1 - 2019/8/1

N2 - We study the impact of formal and informal institutional constraints on firm innovation, using 2012 World Bank Enterprise Survey data in China. We propose a framework identifying both the degree of innovative performance and innovator type of the firm. Our analysis shows that (1) constraints of formal governmental system positively associate with firm innovative performance, making firms more likely to be innovators than non-innovators; (2) constraints of legal system make firms more likely to be imitators than innovators; (3) formal financial constraints negatively associate with firm innovative performance and make firms more likely to be non-innovators than innovators; (4) prevalence of briberies make firms more likely to be either non-innovators or less-effective innovators than innovators. Our study enriches institutional theory and innovation research by building a framework that encompasses multiple dimensions of formal and informal institutional constraints and two levels of innovative performance, and offers deeper understanding of innovative performance of small and medium firms in transition economies like China.

AB - We study the impact of formal and informal institutional constraints on firm innovation, using 2012 World Bank Enterprise Survey data in China. We propose a framework identifying both the degree of innovative performance and innovator type of the firm. Our analysis shows that (1) constraints of formal governmental system positively associate with firm innovative performance, making firms more likely to be innovators than non-innovators; (2) constraints of legal system make firms more likely to be imitators than innovators; (3) formal financial constraints negatively associate with firm innovative performance and make firms more likely to be non-innovators than innovators; (4) prevalence of briberies make firms more likely to be either non-innovators or less-effective innovators than innovators. Our study enriches institutional theory and innovation research by building a framework that encompasses multiple dimensions of formal and informal institutional constraints and two levels of innovative performance, and offers deeper understanding of innovative performance of small and medium firms in transition economies like China.

U2 - 10.5465/AMBPP.2019.17441abstract

DO - 10.5465/AMBPP.2019.17441abstract

M3 - Journal Article (refereed)

VL - 2019

SP - 17441

JO - Academy of Management Annual Meeting Proceedings

JF - Academy of Management Annual Meeting Proceedings

SN - 0065-0668

IS - 1

ER -