Impact of Innovation Culture, Organization Size and Technological Capability on the Performance of SMEs: The Case of China

GuoXiang Tang, Kwangtae Park, Anurag Agarwal and Feng Liu
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GuoXiang Tang: Hyundai Motor Group, Beijing 101300, China
Kwangtae Park: Korea University Business School, Korea University, Seoul 02841, Korea
Anurag Agarwal: College of Business, Florida Gulf Coast University, Fort Myers, FL 33965, USA
Feng Liu: Korea University Business School, Korea University, Seoul 02841, Korea

Sustainability, 2020, vol. 12, issue 4, 1-14

Abstract: Small and medium-sized enterprises (SMEs) in both the manufacturing and service sectors have been viewed as an important driving force behind the rapid economic growth in China. There are multiple factors that drive the success of SMEs. In this paper, we study the effect of innovation culture, technological capability, and organization size on the performance of SMEs in China. We hypothesize that firm performance is positively affected by each of these factors. We use data from 1124 SMEs in China and apply regression analysis to test our hypotheses. We find that technological capability and organization size have a statistically positive effect on the performance of SMEs. Because manufacturing and service industries have distinct characteristics, we also compare the effects of these factors on firm performance within these industries. We find that technological capability is positively and statistically significantly related to firm performance in the manufacturing industry but not in the service industry, while innovation culture is positively and statistically significantly related to firm performance in the service industry but not in the manufacturing industry.

Keywords: Innovation culture; organization size; technological capability; firm performance; SMEs; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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