Research On The Mechanism Of Technological Diversification On Manufacturing Firms’ Innovation Performance

The report at the 19 th National Congress of the Communist Party of China(CPC)indicates that “We will work faster to build China into a manufacturer of quality and develop advanced manufacturing”,and promote the transformation and upgrading of traditional manufacturing industries.Under the dual impact of the China-US trade war and the COVID-19 pandemic,Chinese manufacturing firms are facing the double risk of decoupling from international market and advanced technologies.Therefore,under the double pressure of the national innovation-driven strategy and the severe market competition,single technology is difficult to support the survival and development of Chinese manufacturing firms.Implementing technological diversification strategy,entering the new technology field,and thus gaining advanced technological knowledge and resources,is a feasible path for Chinese manufacturing firms to improve innovation ability,enhance innovation performance and ultimately achieve transformation and upgrading.From a systematic literature review,it suggests that the studies on the relationship between technological diversification and innovation are attached great importance by sholars as the development of Technological Innovation Theory.However,those research conclusions are inconsistent,and the mechanism between technological diversification and innovation is not clearly revealed.Therefore,it’s difficult to employ the research findings from extant studies to guide Chinese manufacturing firms to implement technological diversification strategies,especially for those manufacturing firms facing the problems of transformation and upgrading.Based on the above practical and theoretical background,this dissertation fully considers the current background of transformation and upgrading for Chinese manufacturing firms,regards the Chinese listed manufacturing companies as the research object,collects corresponding research data over the period of 2012-2020,and employs the viable empirical research methodologies to firstly explore the mechanism between technological diversification and enterprise innovation performance,secondly reveal the moderating mechanism from the perspective of resource and governance heterogeneity,respectively,and finally investigate the role that enterprise property rights plays in above mentioned perspectives of heterogeneity.More specifically,the main contents and contributions of this dissertation include the following three aspects:First,based on the data of listed Chinese manufacturing firms,this dissertation explores the mechanism of the nonlinear relationship between technological diversification and enterprise innovation performance,from the perspective of innovation benefits and costs.It is found that there is a significant inverted U-shaped relationship between technological diversification and manufacturing firms’ innovation performance,and the key enterprise characteristics will enhance(or weaken)this inverted U-shaped relationship by influencing the benefits or costs(or both)incurred by technological diversification.Therefore,the mechanism of technological diversification on manufacturing firms’ innovation performance under the background of China’s transition economy is clarified through these research findings.This dissertation elaborates the mechanism of technological diversification on innovation performance of manufacturing enterprises from the dynamic change of innovation benefits and costs,thus opens the "black box" of the dynamic changing process,and further verifies the influence of key enterprise characteristics on the mechanism of technological diversification on enterprise innovation performance.It provides theoretical support for Chinese manufacturing firms to improve innovation performance by implementing technology diversification strategies.Second,from the perspective of heterogeneity,the moderating effects of resource and governance heterogeneity on the relationship between technological diversification and manufacturing firms’ innovation performance are examined.It is found that the internal resource accumulation,which is represented by redundant resources,and the external resource acquisition,which is represented by government subsidies,are important moderating factors that can affect the above inverted U-shaped relationship.Meanwhile,internal and external governance heterogeneity can significantly affect the above inverted U-shaped relationship through ownership structure,management incentive and supply chain partner management.By doing so,this dissertation also reveals the moderating mechanism of resource and governance heterogeneity on the relationship between technology diversification and enterprise innovation performance of Chinese manufacturing firms from the perspective of heterogeneity,verifies the key resource and governance heterogeneity factors that can affect the relationship between technology diversification and innovation performance,and enriches and develops the relevant research on enterprise innovation from the perspective of heterogeneity.It provides practical guidance for enterprises to optimize resource allocation,and strengthen internal and external corporate governance.Third,from the perspective of enterprise property rights,this dissertation investigates how state-owned-enterprises(SOEs)and privately-owned-enterprises(POEs)can differently affect the moderating effects of resource and governance heterogeneity.By verifying the joint moderating effects of the enterprise property rights on resource and governance heterogeneity,it is proved that the moderating mechanisms of resource and governance heterogeneity often have different moderating paths in SOEs and POEs.These research findings finally identify the key roles that SOEs and POEs play in the moderating effect of resource and governance heterogeneity on the relationship between technology diversification and innovation performance.And this different moderating path is caused by their own resource endowment and different institutional environments.Accordingly,it can offer support for decision making process when initiating technology diversification strategies for both SOEs and POEs.In summary,based on the current background of China’s transition economy,this dissertation clarifies the mechanism of technological diversification on Chinese manufacturing firms’ innovation performance,reveals the key contextual factors that can moderate the above mechanism from the perspective of resource and governance heterogeneity,and identifies the key roles that SOEs and POEs play in the above moderating effects due to their resource endowment and different institutional environments.Therefore,this dissertation provides important theoretical support and practical guidance for Chinese manufacturing firms when implementing technological diversification strategies and ultimately improve enterprise innovation performance and promote transformation and upgrading.