Firm Size and Innovation in Electronic and Telecommunication Equipment Manufacturing Industry

Using China's province-level panel data from 1998 to 2010, this paper explores the empirical relationship between firm size and innovation based on dynamic panel data model. The results indicate that the firm size makes positive and significant contribution to the innovation in electronic and telecommunication equipment manufacturing industry, which increases non-linearly with the firm size. It is also found that corporate profits and foreign direct investment level have no stable and significant effects on the innovation, but economic development levels and openness rate have significantly positive effects on it.