Firm-level Human Capital and Innovation: Evidence from China

Xiuli Sun, Haizheng Li and Vivek Ghosal ()

No 6370, CESifo Working Paper Series from CESifo

Abstract: Understanding the factors that may produce a sustained rate of innovation is important for promoting economic development and growth. In this paper, we examine the role of human capital in firms’ innovation by using a large sample of manufacturing firms from China. We use two firm-level datasets from China: one from metropolitan cities, and one from provincial small and medium sized cities. Patent applications are used as the measure of innovation. Human capital indicators used include skilled human capital (number of highly educated workers), general manager’s education and tenure, and management team’s education and age. We find that skilled human capital has a significant positive effect on firms’ innovation, while the management team’s age has a significant negative effect on innovation. The General Manager’s tenure plays a significant positive role in firm innovation in metropolitan cities, while it is the General Manager’s education that has a positive and significant effect on firms’ innovation in small and middle cities. We also find that the effect of R&D on patents is insignificant for firms in large cities, but it is positive and significant in the smaller and medium sized cities. We conclude by noting some policy issues for promoting innovation in developing economies.

Keywords: human capital; education; innovation; patents; R&D; economic development; Asia; China (search for similar items in EconPapers)
JEL-codes: D21 D22 I25 J24 L13 O32 O33 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-bec, nep-cse, nep-cta, nep-hrm, nep-ino, nep-sbm, nep-sea, nep-tid, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Firm-level human capital and innovation: Evidence from China (2020)
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