Innovation source and performance: a firm-level analysis of high-tech sector in China

With a global focus on China regarding its significant growth phenomenon, this paper examines the relationship between innovation source and performance at firm level in China. Specifically, the focus is on two dimensions of innovation performance: patents and new product development, using data from 1,111 firms in the high-tech sector in Zhejiang province. Key findings are: 1) In-house R%D efforts are having impacts on firms' innovation performance. Specifically, R%D personnel are positively associated with patents applications, while investments in R%D are positively associated with new products. Moreover, existence of R%D institutions is positively associated with innovation performance using both measures. 2) Technology imports are having a direct impact on the development of new products. 3) Product exports prove to be positively associated with innovation performance using both measurements. The study contributes to the existing knowledge field in innovation management by providing an empirical and contextual analysis. Moreover, it provides insights to Chinese policy makers in the better promotion of indigenous innovation.