Impact of corporate entrepreneurial strategy on firm performance in China
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Impact of corporate entrepreneurial strategy on firm performance in China Qiuqin He 1 & Minglin Wang 1 & Clara Martínez-Fuentes 2 # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Implementing corporate entrepreneurial (CE) strategies is a panacea for established firms achieving high performance and gaining sustained competitive advantage in a fast-changing business environment. This paper investigates the effects of CE strategy on firm performance at both overall and individual sub-category (investing in R&D, brand equity, organisational capital and human capital) levels with Chinese listed companies over the period 2010 to 2018. The empirical results indicate two points. (1) Adopting CE strategies has a positive effect on firm performance. When investigating the influence of the specific sub-category, only investing in R&D and human capital influences firm performance significantly, while the effects of investing in brand equity and organisational capital are insignificant. (2) The effects of CE strategy and its sub-categories on firm performance exist heterogeneity across firm ownership and industry context. Specifically, the effect of CE strategy in state-owned (manufacturing) firms is larger than that in privately-owned (service) firms; stateowned firms’ performance is driven by R&D investment, while privately-owned firms’ performance is driven by R&D and human capital investment; manufacturing firms’ performance is driven by R&D and brand equity investment, while service firms’ performance is driven by human capital investment. Keywords Corporate entrepreneurial strategy . Firm performance . Heterogeneity . China
* Minglin Wang [email protected] Qiuqin He [email protected] Clara Martínez-Fuentes [email protected]
1
Economics and Management School, Hangzhou Normal University, No.2318 Yuhangtang Road, Cangqian Street, Yuhang District, Hangzhou, Zhejiang 311121, People’s Republic of China
2
University of Valencia, Valencia, Spain
International Entrepreneurship and Management Journal
Introduction It is an essential issue how established firms achieve high performance and gain sustained competitive advantage in a fast-changing business environment. Some studies suggest that implementing corporate entrepreneurial (CE) strategies can be a panacea (Covin and Miles 2007; Ireland et al. 2009; Bierwerth et al. 2015; He et al. 2019). Covin and Miles (2007), for example, find that firms that embrace entrepreneurship as core to their strategies will outperform those that do not over the long run. Ireland et al. (2009) propose a CE strategy model and illustrate that the exploitation of entrepreneurial opportunities is positively related to the strength of the organisation’s competitive capability. Bierwerth et al. (2015) find that the pursuing of corporate entrepreneurship positively influences overall, subjective and objective firm performance by using a meta-analysis. He et al. (2019) point out that entrepreneurship is one of the key driving forces of sustained economic developmen
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