Stakeholder Relationship Capability and Firm Innovation: A Contingent Analysis
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ORIGINAL PAPER
Stakeholder Relationship Capability and Firm Innovation: A Contingent Analysis Wei Jiang1 · Aric Xu Wang2 · Kevin Zheng Zhou2 · Chuang Zhang3 Received: 7 September 2018 / Accepted: 11 April 2019 © Springer Nature B.V. 2019
Abstract Despite the growing importance of stakeholder management, few studies have empirically examined the influence of stakeholder relationship capability (SRC) on firm innovation, especially in emerging economies. This study investigates how SRC relates to firm innovation in the presence of governmental intervention and in combination with firm-level characteristics. Using a survey and multiple secondary datasets on the listed Chinese firms, our findings indicate that SRC is positively associated with firm innovation. Moreover, advanced legal development and high-tech status strengthen the positive link between SRC and innovation, whereas state ownership and firm age weaken this relationship. These findings provide novel insights into how firms use stakeholder management to enhance innovation that is beneficial for economic growth. Keywords Stakeholder relationship capability · Stakeholder theory · Innovation · Government intervention · China
Introduction Innovation is an important means of boosting economic growth and improving social welfare; its contribution to social welfare includes alleviating poverty, promoting smart urbanization, and achieving environmental sustainability (Miles et al. 2002; Porter 1990; Voegtlin and Scherer 2017). Empirical evidence also reveals a strong relationship between innovation and economic growth in countries that have succeeded in catching-up in the industrialization process (Fagerberg and Srholec 2008; Kim 1997; Nelson 1993). Accordingly, governments in emerging economies such as
* Kevin Zheng Zhou [email protected] * Chuang Zhang [email protected] Wei Jiang [email protected] Aric Xu Wang [email protected] 1
School of Management, Xiamen University, Xiamen, China
2
Faculty of Business and Economics, The University of Hong Kong, Pokfulam, Hong Kong
3
School of Business Administration, Dongbei University of Finance and Economics, Dalian, China
China have prioritized innovation as national-level strategies to foster economic development and social progress (Shu et al. 2016; Zhou et al. 2017). Innovation and value creation are generated in networks of firms that include multiple stakeholders such as customers, suppliers, and other players in broad business communities (Harrison et al. 2010; Harrison and Wicks 2013; Li et al. 2018). According to stakeholder theory, a firm should establish trusting relationships with multiple stakeholder groups and incorporate their needs and demands into its strategyforming processes to obtain social support and achieve better performance (Jones 1995; Jones et al. 2018). Good stakeholder relationships facilitate a firm’s access to valuable information (Desai 2018; Harrison et al. 2010) and improve both market (Talke and Hultink 2010) and financial performance (Cavazos et al. 2012; Choi and W
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