Innovative capability and export performance of Chinese firms

This paper considers the role of the seven innovation capability dimensions (learning, research and development (R&D), manufacturing, marketing, organizational, resource allocating and strategy planning) and the three firm characteristics (domestic market share, size and productivity growth rate) in determining the export performances for a sample of 213 Chinese industrial firms. The empirical analysis of this research reveals the findings listed below: 1. Export growth is closely related to the total improvement of innovation capability dimensions, except for the manufacturing capability. 2. While domestic market share has no significant impact on export performances, productivity growth rate significantly increases or promotes export performances rates. Furthermore, while the larger firms demonstrate stronger export competitiveness, there has been no finding of an inverted U-shaped relationship between export and firm size. 3. The core innovation assets (a set of R&D, manufacturing and marketing) alone cannot lead to sustainable export growth. On the contrary, the supplementary innovation assets (a set of four other dimensions) not only enable a firm's technology assets to permeate into the entire competency integration, but also make it possible for a firm to acquire sustainable international competitiveness. This paper shows that the interaction and harmonizing of various innovation assets are the primary factors in the improvement of international competitiveness of Chinese firms. (C) 2002 Elsevier Science Ltd. All rights reserved.