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Asia Pacific Journal of Management

, Volume 30, Issue 3, pp 717–734 | Cite as

Ownership concentration and product innovation in Chinese private SMEs

  • Ziliang Deng
  • Peter S. Hofman
  • Alexander NewmanEmail author
Article

Abstract

Product innovation is extremely important to the growth, success, and ultimate survival of firms. Although its unique features in small and medium-sized enterprises (SMEs) have gained growing attention in the literature, there is limited knowledge as to how ownership concentration moderates the relationship between product innovation and its determinants. Based upon insights from agency and institutional theories, we examine the moderating effects of ownership concentration on the relationship between product innovation and its key determinants in Chinese SMEs, utilizing a large dataset of 43,728 Chinese firms over the period 2005–2006. We focus on examining the differences between single-owner SMEs, where there is dominant control of one family member, and multiple-owner SMEs, where principal-agent conflicts and principal-principal conflicts are more likely to occur. Our findings indicate that single-owned firms tend to convert research and development into product innovation more efficiently than firms with multiple owners, who are typically better at utilizing external sources of knowledge and human capital.

Keywords

China Family ownership Private sector Product innovation Small and medium-sized enterprises 

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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Ziliang Deng
    • 1
  • Peter S. Hofman
    • 2
  • Alexander Newman
    • 2
    Email author
  1. 1.School of BusinessRenmin University of ChinaBeijingChina
  2. 2.Nottingham University Business School ChinaThe University of Nottingham Ningbo ChinaNingboChina

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