R&D, Product and Process Innovation, and Firm Performance: A Case Study of the Chinese Firms

Anwar, Sajid;Sun, Sizhong

Abstract

Alongside rapid economic growth, the Chinese economy has witnessed a notable increase in research and development (R&D) expenditure, escalating from 0.56 per cent of GDP in 1996 to 2.43 per cent in 2021. Recognising the significance of innovation in economic growth, this article utilises unique firm-level data from China for the year 2012 to investigate the influence of R&D, product innovation and process innovation on firm productivity. The findings suggest that R&D positively affects the performance of Chinese firms, as measured by either firm sales or sales per permanent full-time employee. Moreover, product innovation may have a detrimental impact on firm performance, whereas the impact of process innovation lacks robustness.

Journal

Arthaniti

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Arthaniti

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ISBN/ISSN

2517-2654

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Publisher

Sage

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DOI

10.1177/09767479241247615