Improving radical innovation in China’s manufacturing firms: A resource management-based interpretation of social ties and firm capabilities
Journal of Manufacturing Technology Management
ISSN: 1741-038X
Article publication date: 17 June 2019
Abstract
Purpose
The purpose of this paper is to investigate the proper matches between institutional business ties (to state-owned enterprises (SOEs) and to banks) and firm capabilities (technological capability and marketing capability) in impacting the radical innovation of manufacturing firms in China.
Design/methodology/approach
Using the samples of 208 manufacturing firms in China, this study runs three regression models to test all hypotheses.
Findings
Ties to SOEs and ties to banks are positively related to radical innovation of manufacturing firms in China. Further, the technological capability and marketing capability have different functions on moderating the relationship between institutional business ties and radical innovation.
Practical implications
The results imply that managers of manufacturing firms should strive to establish close connections to those organizations that are set-up by government in China. In addition, managers should cautious about the synergies between different institutional business ties and different internal capabilities, and properly matching them to develop radical innovation.
Originality/value
This study enriches and extends the managerial ties literature by going beyond previous narrow focus on either business ties or political ties to address a particular type of organization that is set-up by the governments but operate in the business world. The findings of proper ties-capabilities matches provide nuanced understandings to dynamically manage external resources and internal capabilities for the synergetic benefits (e.g. radical innovation). This study also offer a theoretical paradigm (i.e. resource management model) for manufacturing firms to lessen the striking tension between the urgent needs for radical innovation and the hostile ground for conducting radical innovation.
Keywords
Acknowledgements
This study is supported by the National Natural Science Foundation of China (Nos 71672138 and 71602157), the Fundamental Research Funds for the Central Universities (Nos SK2017029 and SK2018037), China Postdoctoral Science Foundation (Nos 2017M620461 and 2018M641004) and the Soft Science Research Program in Shaanxi Province (No. 2017KRM073).
Citation
Shen, H., Mei, N. and Gao, Y. (2019), "Improving radical innovation in China’s manufacturing firms: A resource management-based interpretation of social ties and firm capabilities", Journal of Manufacturing Technology Management, Vol. 30 No. 7, pp. 1034-1054. https://doi.org/10.1108/JMTM-10-2018-0352
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited