Economics at your fingertips  

Regulation and product innovation: the intermediate role of resource reallocation

Fang Wang () and Xiaoyong Dai ()
Additional contact information
Fang Wang: Institutes of Science and Development, Chinese Academy of Sciences
Xiaoyong Dai: School of Economics and Finance, Xi’an Jiaotong University

Journal of Evolutionary Economics, 2020, vol. 30, issue 4, No 6, 1035-1061

Abstract: Abstract Regulation has been identified as an important determinant of the innovation activities of companies, industries, and entire economies. As such, this paper investigates the potential effects of regulation on the innovative performance of firms in China. We identify an inverted U-shaped relationship between regulation and product innovation performance. That is, in China, regulation plays a positive role in promoting innovation: the more actively firms deal with regulations within certain threshold levels, the better their product innovation performance is. However, after reaching the threshold, the relationship reverses. Further, actively coping with regulations facilitates firms’ access to financial resources, which in turn promotes product innovation. Meanwhile, output distortion significantly impedes product innovation performance. However, regulation does not show a measurable impact on output distortion.

Keywords: Regulation; Product innovation; Resource reallocation; China; F14; D22; P31; O31; L51 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s00191-020-00676-6

Access Statistics for this article

Journal of Evolutionary Economics is currently edited by Uwe Cantner, Elias Dinopoulos, Horst Hanusch and Luigi Orsenigo

More articles in Journal of Evolutionary Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2020-12-26
Handle: RePEc:spr:joevec:v:30:y:2020:i:4:d:10.1007_s00191-020-00676-6