Joint Effects of Ownership and Competition on the Relationship between Innovation and Productivity: Application of the CDM Model to the Chinese Manufacturing Sector

J. Shi*, B. Sadowski, S. Li, Ö. Nomaler

*Corresponding author for this work

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    6 Citations (Web of Science)


    On the basis of a rich panel data set of large- and medium-sized Chinese manufacturing enterprises, we observe that different types of firms (i.e., state-owned enterprises [SOEs], foreign-funded ownership [FFO] of firms, Hong Kong-Macau-Taiwanese [HMT] companies and privately-owned firms) exploit different stages of the innovation - productivity chain depending on the extent of market concentration. By applying a modified CDM model, this study reveals that SOEs tend to be more active in making innovative decisions and pursuing innovative investments but are less efficient in terms of innovation output and labour productivity, whereas FFO firms have relatively high labour productivity but are less active in the first three stages of the innovation - productivity chain. Market competition favours SOEs in the production of additional innovation products. Foreign firms are efficient in labour productivity if they are operating in a concentrated market. By using the metaphor of DNA, this study explains the heterogeneity among these different forms of ownership and generates several managerial implications.

    Original languageEnglish
    Article number1740877620000133
    Pages (from-to)769-789
    Number of pages21
    JournalManagement and Organization Review
    Issue number4
    Publication statusPublished - Oct 2020

    JEL classifications

    • o47 - "Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence"
    • o40 - Economic Growth and Aggregate Productivity: General
    • c50 - Econometric Modeling: General


    • CDM model
    • Chinese manufacturing sector
    • competition
    • ownership type
    • productivity

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