A Multilevel Examination of Performance in Innovation Ecosystems: Board, Asset Scale, Technology, and Government Support

Abstract

We investigate how the firm's board structure (i.e., Chief Executive Officer duality or independence) and its asset scale at the microlevel, the industry's technological intensity at the mesolevel, and the government's initiatives at the macrolevel influence firms’ digital innovation performance in the innovation ecosystem of the Chinese manufacturing industry. Drawing on a longitudinal study of 1098 firms sourced from the China Stock Market and Accounting Research database, in this article, we utilize a coevolutionary multilevel model for the exploration. Our findings reveal that firms led by independent board members with large-scale assets and that have received government subsidies are more likely to achieve superior digital innovation performance. Furthermore, the impact of microlevel factors varies with technological intensity, with medium- and high-tech firms showing more significant innovation performance improvements. We suggest that firms maintain a board composition with a balanced mix of independents with objective oversight and nonindependents with strategic influence and allocate their resources to capitalize on emerging technological trends to perform better in innovation ecosystems. Firms should not solely depend on government support but align their resource basis and governance structures to leverage technology and incentives effectively. Policymakers should craft targeted initiatives depending on the innovation ecosystems’ technological intensity and the firms’ resource endowments.