Green or nongreen innovation? Different strategic preferences among subsidized enterprises with different ownership types

By Zi-Meng Liu, Xu Li, Xuerong Peng, Seoki Lee. 2020

116 citations recorded by the source corpus.

Abstract Governments often turn to subsidies to boost enterprises’ innovation activities, which gives subsidized enterprises room for allocating the subsidies among different innovation activities. Taking insights from institutional logic theory, this paper proposes that enterprises exhibit different subsidy-allocation behaviors between nongreen and green innovations and that the positive effect of subsidies on nongreen innovation is greater than that on green innovation due to the double-spillover problem that is pertinent to green innovation. Further, this paper argues that innovation intensity varies from privately-owned enterprises to local and central state-owned enterprises and that the underlying reason for this phenomenon is that enterprises with different ownership structures behave with different institutional logics, face different environmental and innovation pressures, and hold different innovative resource and capability endowments. We test these hypotheses by using longitudinal data (2010–2015) on 175 publicly-traded firms in the pharmaceutical industry in China. Overall, the results support most of the hypotheses.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/52e6cc0b742b20cb4449beebab2f4e7e172ca0bc