Sources of Institutional Capability for Innovation in China’s Catching up Economy: An Explorative Study

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Author(s): Mark Greeven (Zhejiang University, China)
Copyright: 2014
Pages: 12
Source title: Quality Innovation: Knowledge, Theory, and Practices
Source Author(s)/Editor(s): Latif Al-Hakim (University of Southern Queensland, Australia)and Chen Jin (Zhejiang University, China)
DOI: 10.4018/978-1-4666-4769-5.ch019

Keywords: Information Science Reference / Information Value & Quality / Knowledge Management / Library & Information Science

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Abstract

What are the sources of institutional capability of innovating firms in China’s catching up economy? Firms may develop an institutional capability that offsets the risks of underinvestment in and inaccessibility of resources in the institutional context of a catching up economy. By combining insights from the resource-based view and institutional theory, the authors contribute to the institutional approach to innovation by suggesting that firms can take over certain institutional functions. In this explorative study of entrepreneurial software ventures in Zhejiang, China, the authors identify three sources of institutional capability: local knowledge sharing, legitimacy creation, and strategic flexibility. The findings suggest that the presence of these sources enhances the potential of a firm to create an institutional capability for innovation.

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Sources of Institutional Capability for Innovation in China’s Catching up Economy: An Explorative Study

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