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R&D organization, monitoring intensity, and innovation performance in chinese industry

This paper examines the relationship between organizational design and technological innovation in Chinese industry. In a principal-agent model, monitoring intensity is an endogenously determined input to innovation production. A recursive system of an innovation production function and a monitoring intensity equation, where the latent monitoring intensity is indicated by the existence of an R&D organization, is estimated with a nonlinear two-stage estimator for a sample of large- and medium-sized Chinese state-owned enterprises. It is the first knowledge production function estimate for China's enterprises. I find that R&D organization affects innovation performance positively and significantly.

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Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 12 (2003)
Issue (Month): 2 ()
Pages: 117-144

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Handle: RePEc:taf:ecinnt:v:12:y:2003:i:2:p:117-144
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  1. Lafontaine, Francine & Slade, Margaret E., 1996. "Retail contracting and costly monitoring: Theory and evidence," European Economic Review, Elsevier, vol. 40(3-5), pages 923-932, April.
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