What drives success in product innovation? Empirical evidence in high-tech and low-tech manufacturers in China

The study aims to determine what are the major factors affecting the performance of innovation systems in both high- and low-tech industries in China. Multiple regression and PLS analyses were used to analyse a survey data from 152 manufacturers in China. This study showed that internal R&D and competitors are the major drivers of innovation that improves the sales of new-to-market products. Major barriers of innovation include law regulations, standards and tax issues and the potential market being owned by other firms. The motivating factors include new market entry, improvement of product quality, and increase in market share. Low-tech and high-tech firms may follow different innovation paths and are promoted by differential sources of innovation, barriers and motivating factors. Some innovation activities such as acquisition of external knowledge and preparations are found to have significant mediating effects on the above relationships. The research project brings about specific guidelines for local legislative bodies to enact effective innovation policies that align closely with the innovation characteristics of local industries.