Does internationalization encourage state-owned enterprises to utilize subsidies to innovate? Evidence from high-tech and automobile manufacturing industries of Chinese listed companies
ISSN: 1750-614X
Article publication date: 11 January 2022
Issue publication date: 1 August 2022
Abstract
Purpose
Drawing on the resource-based view, institutional logic and isomorphic pressure theories, this study constructed a theoretical model to explore the correlations between government subsidies and innovation performance. Particularly, this study aims to investigate the moderating effects of ownership types and degree of internationalization on these relationships.
Design/methodology/approach
To empirically test the relationships, the authors use panel data from high-tech manufacturing and automobile manufacturing industries in Chinese A stock listed companies for the period 2011–2015 and performed regression analysis.
Findings
Results indicate that government subsidies positively enhance enterprises’ innovation performance; there is a big gap between government subsidies’ incentive effect on innovation performance between state-owned enterprises (SOEs) and private-owned enterprises (POEs); with the improvement of internationalization, the promotion effect of government subsidies on enterprise innovation performance is strengthened; there is a three-way interaction between government subsidies, degree of internationalization and ownership types, such that in the presence of a low degree of internationalization, there is a big gap in the incentive effect of government subsidies on the innovation performance of SOEs and POEs; in the presence of a high degree of internationalization, the gap is significantly reduced.
Originality/value
This is an empirical study on the impact mechanism of ownership types and internationalization on the relationship between government subsidies and innovation performance in China. It provides valuable insights to show how internationalization can dramatically improve SOEs’ efficiency disadvantages in the allocation of government subsidies to innovation activities.
Keywords
Acknowledgements
Funding: Scientific Research Foundation of Chongqing Technology and Business University (Grant Number 1953145) and National Natural Science Foundation of China (Grant Number 71672021).
Citation
Xie, Y., Boadu, F. and Tang, H. (2022), "Does internationalization encourage state-owned enterprises to utilize subsidies to innovate? Evidence from high-tech and automobile manufacturing industries of Chinese listed companies", Chinese Management Studies, Vol. 16 No. 4, pp. 803-829. https://doi.org/10.1108/CMS-06-2021-0250
Publisher
:Emerald Publishing Limited
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