A Study of the Influence of Entrepreneurs' Geographic and Academic Relationships on Corporate Innovation

A Study Of The Influence Of Entrepreneurs’ Geographic And Academic Relationships On Corporate Innovation

Corporate innovation is an important means of increasing corporate value and maintaining sustained growth of gross domestic product (Allen et al., 2005; Lin et al., 2011). Increasing innovation inputs and boosting core competitiveness are key methods for maintaining a competitive advantage under the “new normal” (Cui et al., 2021). As the drafters and implementers of decisions concerning corporate innovation, entrepreneurs play an important role in corporate innovation activities (Corbett et al., 2007; Cuili et al., 2012). During this key current period in China’s economic transition, when formal institutional systems may not be fully effective, entrepreneurs can rely on informal systems, such as their geographic and academic relationships, to acquire the resources needed for innovation and thus boost their enterprises’ level of innovation (Ren, Cheng et al., 2021; You et al., 2020). Entrepreneurs’ geographic and academic relationships represent the various networks and resources that they have accumulated from their native area and the university they attended. To a certain degree, entrepreneurs’ accumulation of geographic and academic relationships provides external investors with a means of understanding their entrepreneurial ability. This understanding can lessen information asymmetry and, consequently, boost enterprises’ financing ability, thereby easing the problem of insufficient resources for corporate innovation and promoting corporate innovation (Ren, Wang et al., 2021). The existing literature has chiefly focused on the effect of entrepreneurs’ social capital (Wadhwa et al., 2017; Xu, 2016), political connections (Cui et al., 2021; Wadhwa et al., 2017), entrepreneurs’ perceived status (Greitemeyer & Sagioglou, 2016; Hirshleifer et al., 2012), and other entrepreneurial qualities and thinking on corporate innovation. Few studies have investigated the influence of entrepreneurs’ relational capital in the form of geographic and academic relationships on corporate innovation. How does entrepreneurial relationship capital affect corporate innovation? Furthermore, considering the possible impact of entrepreneurial ability endowment and entrepreneur graduation school level, in this paper the authors further examine the influence of entrepreneurial ability endowment and entrepreneur graduation college level on the relationship between the two. In addition, enterprises are operating in a certain external environment, so how the external environment will affect entrepreneurs’ innovation decisions, which is also the focus of this paper.

The authors, therefore, examined A-share companies listed on the Shenzhen and Shanghai stock exchanges between 2012 and 2018 to determine how entrepreneurs’ geographic and academic relationships affect corporate innovation and how entrepreneurs’ ability endowment moderates these relationships. Furthermore, the researchers examined the effect of college education level on entrepreneurs’ geographic and academic relationships and the effect of the external environment on differences in entrepreneurs’ innovation. Based on existing literature, the authors carried out research from the two dimensions of entrepreneurs’ geographical relationship and academic relationship, which expands the research scope of relationship capital on enterprise innovation decision-making, on the one hand, enriches the research on the influencing factors of enterprise innovation, on the other hand, and provides relevant empirical evidence and management enlightenment for how Chinese enterprises can improve their innovation ability and level.

The subsequent content structure of this paper is as follows: The second part provides the literature review and the authors’ hypotheses; the third part illustrates the study design; the fourth part offers the empirical analysis, including robustness tests such as main effect tests and endogeneity tests; the fifth part provides further research; finally, the sixth part ends the paper with conclusions, management implications, and research limitations and prospects.