Impact of industry association on the innovation of small and micro enterprises

ABSTRACT

Employing OLS, GIVE and propensity score-matching (PSM) methods, this study investigates the impact of industry association on the innovation of small and micro enterprises. Using a survey of China micro and small enterprises (CMES), we find that industry association significantly and positively affects the innovative behaviour of small and micro enterprises, and political connection can enhance the innovative effect of industry association. Enterprises with specific advantages and entrepreneurs with strong innovation awareness and high human capital are likely to be an industry association member. Despite certain discriminations for micro firms, industry association welcomes innovative entrepreneurs and promotes the innovation of its members.

KEYWORDS:

• Industry association
• firm innovation
• innovative entrepreneurs
• micro enterprises

JEL CLASSIFICATION:

• O32
• L25

Disclosure statement

The authors declare no conflict of interest.

Additional information

Funding

We acknowledge the financial support from National Statistical Science Research Fund of China [2019LZ36]; Humanities and Social Science Foundation of Ministry of Education of China [19YJC790159].