The effect of region-specific institutions and firm-specific resources on firm’s innovativeness in China

In the recent literature, the assumption that institutions are homogeneous across regions within emerging economics has been challenged. Yet little attention has been paid to the role played by subnational region-specific institutions in firm’s innovativeness. Moreover, the influences of region-level and firm-level factors have been analyzed separately without paying attention to the linkages between them. Thus, this study first tries to investigate the influences of the cross-regional institutional idiosyncrasies in intellectual property (IP) protection and economic internationalization on the local firm’s innovativeness. Furthermore, the study explores how they can interact with a firm’s internal technological competences. The issues are explored using empirical evidence from the specific context of the e-commerce industry in China. It first contributes to institutional theory by identifying the role played by region-specific institutions in innovation. The second contribution lies in developing and testing a contingency perspective combining insights from institutional theory and the resource-based view.