Corporate Innovation and Growth Opportunities

Corporate innovation is both an impetus for firm growth and a source of competitive advantage. Corporate innovation activities have an important impact on the growth opportunities of firms. China has the largest and one of the fastest growing economies in the world. In recent years, the central government of China has been consistently emphasizing the importance of technology development in the manufacturing sector and viewing technology development as an engine for the process of catching up with advanced industrial economies and industrialization. This paper investigates the relationship between corporate innovation and growth opportunities. Using a sample of Chinese listed firms from the period 2007 to 2008, the research results suggest that firms with higher R&D investment have higher growth opportunities. It indicates that corporate innovation activities have important positive impact on corporate growth opportunities.