How Ownership Structures Spillovers for Innovation: Private Sector Inbreeding in Chinese Manufacturing
Time：July 8th (Friday) 2pm-4pm
Location: Zhifuxuan, National School of Development, Peking U.
Speaker: Xia Fan, Associate Professor, ESC Rennes School of Business, France
We examine how ownership structures knowledge spillovers among Chinese manufacturing firms. The paper links three literatures: 1) the interpenetration of institutions and regional networks; 2) the contribution of geography to innovation; and 3) private sector growth in emerging markets. We argue that private sector firms, because they are excluded from the internal networks of the state and of foreign owners, interact more with each other and have a higher percentage of weak ties for information and job search. Thus we find that product innovation in the private sector benefits more from regional agglomeration than firms owned by the state or foreign corporations. We also ask, following an extensive literature, whether large firms act as hegemons or support local innovation. We find evidence of hegemonic behavior that is strongest on other private sector firms. We also find that, consistent with earlier research, small firm agglomeration increases innovation, mostly within the private sector. Higher receptivity to spillovers combined with mutual influence indicates an inbred network within the private sector. Last, firms not privatized by the state and 100% owned by private investors are more inbred. We discuss our findings for research on geography, institutions, innovation and the political economy of emerging markets.
Professor Xia is a permanent associate professor in Department of Strategy and Innovation, ESC Rennes School of Business, France. His research mainly focuses on Corporate Ownership and Governance, Innovation and Corporate Growth. His research has been published on top management journals such as Strategic Management Journal. Professor Xia received his PhD degree from UCLA.