Innovation in emerging economies: How do university-industry linkages and public procurement matter for small businesses?

  • Small businesses face major challenges to becoming more innovative. These challenges are particularly prevalent in emerging economies where high uncertainties are a barrier to innovation. We know from previous studies that linkages to universities, on the one hand, and public procurement, on the other, support large and innovative firms in their efforts to become more innovative. However, we do not know whether these positive effects also hold true for small businesses. In this paper, we focus on how policy strategies reducing information, market and financial uncertainties shape small businesses’ innovation in China. Based on a sample of 926 small businesses derived from the World Bank Enterprises Survey in China (2012), we find that university-industry linkages enhance innovation, though only when it comes to minor forms of innovation. In line with the resource-based view of the firm, this effect is stronger for small businesses with higher capabilities. Moreover, we show that bidding for or delivering contracts to public sector clients has a positive effect on innovation, and in particular of major forms of innovation. In the bidding selection process, private firms and firms with higher capabilities are selected. Our findings show that both policy strategies have enhanced innovation, though with different effects on the degree of novelty. We attribute this finding to the different degrees of uncertainties they address.

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Author:Cornelia StorzORCiDGND, Tobias Ten BrinkORCiDGND, Na ZouGND
Parent Title (English):Asia Pacific journal of management
Publisher:Proquest ; Springer Science + Business Media B.V
Place of publication:Dordrecht [u.a.]
Document Type:Article
Date of Publication (online):2021/06/03
Date of first Publication:2021/06/03
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2023/11/23
Tag:China; Emerging economies; Innovation; Public procurement; Small businesses; University-industry linkages
Page Number:42
First Page:1439
Last Page:1480
Open Access funding enabled and organized by Projekt DEAL. This research has been supported by the Deutsche Forschungsgemeinschaft (DFG) (STO 860/8–1, STO 860/8–2; DFG-TE 1069/5–1, DFG-TE-1069/5–2).
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:O Economic Development, Technological Change, and Growth / O2 Development Planning and Policy / O25 Industrial Policy
O Economic Development, Technological Change, and Growth / O3 Technological Change; Research and Development / O31 Innovation and Invention: Processes and Incentives
O Economic Development, Technological Change, and Growth / O3 Technological Change; Research and Development / O38 Government Policy
Licence (German):License LogoCreative Commons - CC BY - Namensnennung 4.0 International