Re-Innovation from Failure, Institutional Environmental Differences, and Firm Performance: Evidence from China
Due to an anti-failure bias, theoretical and practical studies have not focused much on the problem of innovation failure. The literature does not include studies on how the effect of re-innovation input on firm performance can still be explained by existing theories, especially in the case of pr...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Editura ASE
2020-02-01
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| Series: | Amfiteatru Economic |
| Subjects: | |
| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_2886.pdf |
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| Summary: | Due to an anti-failure bias, theoretical and practical studies have not focused much on the
problem of innovation failure. The literature does not include studies on how the effect of
re-innovation input on firm performance can still be explained by existing theories,
especially in the case of previous innovation failures. To explore the intrinsic relationship
between the re-innovation from failure and firm performance, as well as the influencing
mechanism of the institutional environment differences on a firm’s re-innovation activities,
using the data of the Listed Companies in China’s pharmaceutical manufacturing industry
from 2008 to 2014 and a multiple regression model, the relationships between the reinnovation from failure, institutional environment differences, and firm performance were
analyzed from 3 aspects: government intervention, financial development, and legal
environment. The results show that the re-innovation input from failure has a significant
positive impact on firm performance. The level of government intervention and the level of
financial development play significant negative and positive moderating roles in the
relationship between the re-innovation input and firm performance, respectively, and the
above-mentioned effects are more prominent in eastern China. Moreover, with the
improvement of the marketization of the financial industry, the beneficial effect of the reinnovation input from failure on firm performance in state-owned firms will be further
strengthened. However, the moderating effect of the legal environment is not obvious. |
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| ISSN: | 1582-9146 2247-9104 |