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Centralization and innovation performance in an emerging economy: testing the moderating effects

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Abstract

Previous research examining the relationship between centralization and innovation performance has suggested conflicting views and mixed results. Drawing on the knowledge-based view, this study identifies two mechanisms underlying the relationship between centralization and innovation performance: information flow and behavior change of organizational members. We argue that the relationship between centralization and innovation performance can be positively moderated if the constrained information flow can be compensated, or the undermined motivation of employees can be adjusted, or both information and behavior drawbacks can be mitigated. With a sample of Chinese high-tech firms, we find that a positive relationship between centralization and innovation performance is more likely to occur if the firm owns higher-level human capital, charismatic leadership or entrepreneurial orientation. These findings shed light on the debate concerning when centralization enhances innovation performance and provide managerial implications for firms in emerging economies.

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Acknowledgments

The authors are grateful to the comments by anonymous reviewers, and thank the support by China National Natural Science Foundation (70902010, 71071064, 71232001, 71172090).

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  1. School of Management, Huazhong University of Science & Technology, Wuhan, 430074, China

    Zhi Yang, Xuemin Zhou & Pengcheng Zhang

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  1. Zhi Yang
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Correspondence to Xuemin Zhou.

Appendix

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Table 4 Measurement items and validity assessment
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Fig. 1
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Centralization and innovation performance: The moderating role of human capital

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Fig. 2
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Centralization and innovation performance: The moderating role of charismatic leadership

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Centralization and innovation performance: The moderating role of entrepreneurial orientation

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Yang, Z., Zhou, X. & Zhang, P. Centralization and innovation performance in an emerging economy: testing the moderating effects. Asia Pac J Manag 32, 415–442 (2015). https://doi.org/10.1007/s10490-014-9394-8

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