How Chinese firms employ open innovation to strengthen their innovative performance

China became the second-largest economy behind the USA in 2010. While there is quite some macroeconomic research documenting the technological catching-up of China as a nation, there is only little research studying how individual Chinese firms are catching up. This paper draws on the open innovation perspective to explore how Chinese firms improve their innovative performance.

Our empirical analysis is based on a sample of 91 native Chinese firms in high-tech industries. The results indicate that Chinese firms widely implement an open innovation approach to strengthen their innovative performance. These firms use: 1 technology in-licensing agreements to obtain access to technologies 2 long-term alliances with foreign partners to access state-of-the-art technologies 3 collaboration with local universities and R&D institutes to broaden their technological strengths 4 collaboration with the local industrial community to deepen their technological skills.