Network resources and the innovation performance: Evidence from Chinese manufacturing firms

Abstract

The advance of globalization has deeply changed the form of competition and the resource base of firms. At the same time, the forming and development of global production network opened an opportunity window for Chinese firms to accumulate new resources and enhance their capabilities. Extending prior researches on network resource and innovation, this paper first elaborated a theoretical framework in which firms' network resources affects innovation performance through technological capabilities and relative bargaining power. Then a survey was taken out in Chinese domestic firms engaging in global production networks. We used hierarchical regressions to test the mechanism of network resources and innovation performance. Results showed that network resources are important sources of competitive advantage. However, the effect of network resources on firms' innovation performance was rather complicate: besides direct influences, the effect on innovation performance was partly achieved through the mediating role of technological capability and relative bargaining power. From the point of value creation, accessed resources directly enhanced innovation performance and embedded resources facilitate the technological capability and hence enhanced innovation performance. From the point of value capturing, excess use of accessed resources will cause dependency on partner firms and reduce the proportion of value appreciated by the focal firm.