Open Innovation as a Response to Constraints and Risks: Evidence from China*

Xiaolan Fu, Jizhen Li (), Hongru Xiong () and Henry Chesbrough ()
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Jizhen Li: Research Center for Technological Innovation, and School of Economics & Management, Tsinghua University
Hongru Xiong: Research Center for Technological Innovation, Tsinghua University and Development Research Center of the State Council of China
Henry Chesbrough: Haas School of Business Faculty Wing, F402 University of California

Asian Economic Papers, 2014, vol. 13, issue 3, 30-58

Abstract: This paper examines the determinants of open innovation as a response to the constraints and risks of innovation that firms face in emerging economies. A recent national firm-level survey of 1,400 firms in the manufacturing sector is used as the basis of the analysis. We find that institutional, financial and knowledge/skills-related risks and constraints are all significantly associated with these firms' depth and breadth of openness in innovation. The responses, however, vary across firms of different ownership types. Foreign-invested firms appear to be most responsive and take action to widen and deepen their openness in innovation. Privately owned firms have made significant responses to market- and institution- and finance- and risk-related impediments but not to knowledge- and skills-related impediments. State-owned firms appear to be least responsive in use of open innovation. Firm size and industry specific effects also appear to have significant moderating effect on firms' responses to the various constraints. These findings are supported by an in-depth study of the Chinese semiconductor industry. © 2014 The Earth Institute at Columbia University and the Massachusetts Institute of Technology

Keywords: innovation; emerging economy; risks; foreign-invested firms; impediments (search for similar items in EconPapers)
JEL-codes: F00 F30 O14 O19 O24 O31 O33 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (9)

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