The roles of competition on innovation efficiency and firm performance: evidence from the Chinese manufacturing industry

• Xunjiang Huang ^[1]
  1. [1] Northeastern University, China
• Localización: European Research on Management and Business Economics, ISSN 2444-8834, Vol. 29, Nº. 1, 2023, págs. 1-10
• Idioma: inglés
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• Resumen

  • Firms, especially Chinese manufacturing firms, invest significant resources in innovation activities to sustain their position in the intensifying competitive environment. However, innovation efficiency has led to grow- ing concerns due to the rapid increase in R&D expenditures. The purpose of this study is to explore the com- plicated role of competition on innovation efficiency and firm performance with a sample of 12,020 Chinese manufacturing firms for the period 2005−2007. The results show that most Chinese manufacturing firms are inefficient in R&D activities. Competition forces firms to focus on the improvement of innovation efficiency, but at the same time, it also undermines collaboration and leads to unpredictable R&D results. Therefore, there is an inverted U-shaped relationship between these variables. Competition also negatively moderates the positive impact of innovation efficiency on firm performance. The findings help firms formulate appropri- ate innovation strategies for sustainable innovation performance