Internal Resources, External Resources and the Innovation of Start-up Firms in China: A Temporal Dynamic Model

There exist two ways for firms to develop product innovation. One is to rely on internal resources, and the other is to take advantage of network resources. We argue that as the locus of innovation is shifting from firm-centric to network-centric, the roles of internal and network resources in innovation will also evolve.Specifically, we compare and contrast the dynamic impacts of internal resources and network resources in high tech start-ups in China. We argue that a firm’s internal resource attributes such as human capital (e.g., talented scientists and top management team experience), compared with network attributes such as social capital (e.g., firm centrality and brokerage position), will have more impact on the innovative output of a high tech start-up at an earlier stage rather than at a later stage, whereas a firm’s network attributes tend to exert more influence on firm innovation at a later stage. Further, these dynamic impacts are moderated by firm ownership, regional development, and technological dynamism in China.We will collect survey data from 300 high tech start-ups in China to test our hypotheses. This context is suitable because firms in China are facing increasing demand of product innovation and have embarked on the transition from original equipment manufacturer (OEM) to original design manufacturer (ODM) and original brand manufacturer (OBM). The findings of this study will inform researchers, practitioners, and policy makers on the relevant importance of different resources in product innovation. This study contributes to the academic literature by delineating the theoretical boundaries of both resource-based view (RBV) and network theory from a dynamic angle.