The existing literature on innovation concentrates mostly on large industrial firms and high-technology industries, whereas, little attention has been given to agribusiness. Empirical evidence regarding the driving fo...The existing literature on innovation concentrates mostly on large industrial firms and high-technology industries, whereas, little attention has been given to agribusiness. Empirical evidence regarding the driving forces behind innovation in agribusinesses in developing countries, China in particular is scarce. This paper helps fill that void. It develops a framework in which innovation results from synergies between internal resources and external networks. This paper applies and tests the framework using 2003-2005 data from a panel survey of 32 leading agribusiness firms in Shandong Province, China. The empirical results indicate the importance of internal resources, external networks and the synergies between them. We find that R＆D expenditures and the number of technical employees are internal resources that are both important to product innovation. Surprisingly, management quality is negatively related to the possession of a unique technology and new products as a proportion of all products. It is possible that management quality is associated with more formalization and rigidity in decision-making, hindering creativity and lengthening the new product development cycle. In order to develop innovative products, our results suggest that investing in R＆D and hiring more technical staff may be more effective approaches than spending on managerial talent.展开更多
文摘The existing literature on innovation concentrates mostly on large industrial firms and high-technology industries, whereas, little attention has been given to agribusiness. Empirical evidence regarding the driving forces behind innovation in agribusinesses in developing countries, China in particular is scarce. This paper helps fill that void. It develops a framework in which innovation results from synergies between internal resources and external networks. This paper applies and tests the framework using 2003-2005 data from a panel survey of 32 leading agribusiness firms in Shandong Province, China. The empirical results indicate the importance of internal resources, external networks and the synergies between them. We find that R＆D expenditures and the number of technical employees are internal resources that are both important to product innovation. Surprisingly, management quality is negatively related to the possession of a unique technology and new products as a proportion of all products. It is possible that management quality is associated with more formalization and rigidity in decision-making, hindering creativity and lengthening the new product development cycle. In order to develop innovative products, our results suggest that investing in R＆D and hiring more technical staff may be more effective approaches than spending on managerial talent.
