How does competition by informal firms affect the innovation in formal firms?

Jorge A. Heredia Pérez, Xiaohua Yang, Ou Bai, Alejandro Flores, Walter Heredia Heredia

Research output: Contribution to journalArticle in a journalpeer-review

24 Scopus citations


This study applies a resource-based perspective to investigate how competition by informal firms affects innovation in formal firms in China. By analyzing survey data, collected from 1,686 Chinese manufacturing firms, we find that formal firms tend to increase their rate of innovation when faced with informal competition. However, formal firms’ access to increased global supply chain collaboration mitigates the challenges presented to their rate of innovation by the informal firms. We present implications for future research, practice, and policy-making.
Original languageEnglish
Pages (from-to)173-190
Number of pages18
JournalInternational Studies of Management and Organization
Issue number2
StatePublished - 3 Apr 2019

Bibliographical note

Publisher Copyright:
© 2019, © 2019 Taylor & Francis Group, LLC.


  • China
  • Informal firms
  • formal firm
  • global supply chain collaboration
  • innovation


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