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Industry association networks, innovations, and firm performance in Chinese small and medium-sized enterprises

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  • Qiao, Peng-hua
  • Ju, Xiao-feng
  • Fung, Hung-Gay

Abstract

This study uses panel data analysis to examine the effects of membership in industry association networks on innovation and firm performance in Chinese small and medium-sized enterprises (SMEs) listed on the Shenzhen Stock Exchange Small and Medium-size Enterprises Board from 2007 to 2011. There are several interesting findings. First, research and development (R&D) and technology staff have a positive and significant effect on innovation at SMEs. Second, participation in industry association networks (defined as comprising business association networks and technology association networks) can improve firm innovation at Chinese SMEs. Third, innovation is found to have a positive effect on firm performance at SMEs. Finally, membership in industry association networks can improve firm efficiency and increase non-operating income but at the expense of higher management costs at SMEs. Our study has important policy implications for policymakers and SMEs in China.

Suggested Citation

  • Qiao, Peng-hua & Ju, Xiao-feng & Fung, Hung-Gay, 2014. "Industry association networks, innovations, and firm performance in Chinese small and medium-sized enterprises," China Economic Review, Elsevier, vol. 29(C), pages 213-228.
    • Handle: RePEc:eee:chieco:v:29:y:2014:i:c:p:213-228
    DOI: 10.1016/j.chieco.2014.04.011
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    2. Penghua Qiao & Anna Fung & Jianchun Miao & Hung†Gay Fung, 2017. "Powerful Chief Executive Officers and Firm Performance: Integrating Agency and Stewardship Theory," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(6), pages 100-119, November.
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    4. Zhang, Gupeng & Zhou, Jianghua, 2016. "The effects of forward and reverse engineering on firm innovation performance in the stages of technology catch-up: An empirical study of China," Technological Forecasting and Social Change, Elsevier, vol. 104(C), pages 212-222.
    5. Luo, Lianfa & Cheng, Zhiming & Ye, Qingqing & Cheng, Yanjun & Smyth, Russell & Yang, Zhiqing & Zhang, Le, 2023. "Nonmonetary Awards and Innovation: Evidence from Winning China's Top Brand Contest," GLO Discussion Paper Series 1345, Global Labor Organization (GLO).
    6. Zhang, Dongyang & Guo, Yumei, 2019. "Financing R&D in Chinese private firms: Business associations or political connection?," Economic Modelling, Elsevier, vol. 79(C), pages 247-261.
    7. Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ & Prasanna, RPIR & Jayasundara, JMSB & Rajapakshe, PSK, 2019. "Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review," MPRA Paper 98419, University Library of Munich, Germany.
    8. Lantao Zhu & Xi Li & YingChuan Wang, 2021. "The Impact of Social Capital on Residents’ Supportive Attitude to Tourism Development: The Mediation Role of Perception of Justice," SAGE Open, , vol. 11(3), pages 21582440211, September.
    9. Yao, Nengzhi(Chris) & Guo, Qiaozhe & Tsinopoulos, Christos, 2022. "The bright and dark sides of institutional intermediaries: Industry associations and small-firm innovation," Research Policy, Elsevier, vol. 51(1).
    10. Shuai Wang & Fayyaz Ahmad & Yanlong Li & Nabila Abid & Abbas Ali Chandio & Abdul Rehman, 2022. "The Impact of Industrial Subsidies and Enterprise Innovation on Enterprise Performance: Evidence from Listed Chinese Manufacturing Companies," Sustainability, MDPI, vol. 14(8), pages 1-17, April.
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    12. Penghua Qiao & Mengli Lv & Yuping Zeng, 2020. "R&D Intensity, Domestic Institutional Environment, and SMEs’ OFDI in Emerging Markets," Management International Review, Springer, vol. 60(6), pages 939-973, December.
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    More about this item

    Keywords

    Firm performance; Industry association networks; Innovations; Small and medium-sized enterprises;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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