Firm-level human capital and innovation: Evidence from China

Xiuli Sun, Haizheng Li and Vivek Ghosal ()

China Economic Review, 2020, vol. 59, issue C

Abstract: This paper examines the role of human capital in firms' innovation. Based on a World Bank survey of manufacturing firms in China, we use two firm-level datasets: one from large metropolitan cities, and one from mid-sized cities. Patents are used as an indicator of innovation. The human capital indicators we use include the number of highly educated workers, the general manager's education and tenure, and the management team's education and age. We use the Negative Binomial and Instrumental Variables estimators to estimate patent production function models that are augmented by our human capital variables. We also use the zero-inflated Negative Binomial model to examine the likelihood of innovation. We find that the human capital indicators play an important role in influencing patenting, and that some of the human capital variables appear to have a greater impact on patenting in mid-sized cities. Our human capital estimates are obtained after controlling for firms' R&D, size, market share, age, and foreign ownership, as well as fixed effects to control for industry-specific characteristics, and firms' location and geography.

Keywords: Patents; Innovation; Human capital; Skilled labor; Managerial human capital; Education; R&D; Geography (search for similar items in EconPapers)
JEL-codes: D21 D22 I25 J24 L13 O32 O33 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Working Paper: Firm-level Human Capital and Innovation: Evidence from China (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:59:y:2020:i:c:s1043951x1930149x

DOI: 10.1016/j.chieco.2019.101388

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