The Influence of Government Green Development Policy on a Firm’s Disruptive Innovation

Round 1

Reviewer 1 Report

This paper examines whether local governments' innovation policies leads to disruptive innovation at the firm level, using a scale based on a survey, and the "number of policies" mentioned on local governments' websites. An important backdrop to this paper is the enormous economic success in innovation activities in China the last couple of decades.

Based on "existing research", author conclude that the government impact on disruptive innovations is concentrated on:
 - government regulation 
   (this should not surprise anyone. given that this is their unique instrument.)
 - assisting in R&D, and 
 - developing markets.

A problem is that the independent variable is measured by the "number of policies" without qualifying the policy with regard to importance or duration. This leaves us with little understanding of what kind of government influence we find when we detect a relationship with policy and innovation. The authors include relevant control variables and a robustness test, but the independent variable "policies", should be qualified in some manner to ensure that the influence found is of any significance. The dummy variable used could be scaled with reference to variables such as "budget cost", "number of citizens affected", "reduction of GHG emissions" and similar elements. 

Control variables at the individual, firm and industry level are well handled.

The authors find that 
 - Entrepreneurs in regions with green or sustainable development policies are more likely to engage in disruptive innovation behavior
 - The influence is positively correlated with firm size 

Thus, policies seems to have an effect on firm practices, and they are correlated to a certain degree with firm size.  

The introduction promises too much, in my view: It is stated that the paper will 
 - Enrich the theoretical framework of disruptive innovation. (You do not capture macroeconomic impacts? You observe local government policies as an antecedent variable!)
 - Complement the institutional theory by analysing practices in China. Given that you do not qualify "policy" (ref. above) and that the focus is on the output of the institution (policy), not on how this output was created, I would say that the institutional theory contribution is limited.
 - Enrich the scope of existing research.
 - And contribute by examining the impact of government policies on Chinese manufacturing firms in the stage of supply-side reform and expanding the scope of application of related theoretical concepts.

This papers' main contribution in my view is to show how local policies in china correspond with disruptive firm innovation in a way that complements what we know about similar effects in the western hemisphere. 

Challenges:  
The authors should have a more explicit definititon of "disruptive innovation behaviour" before the operationalization in the survey questions is presented. (What is the difference between  "disruptive innovation" and "disruptive innovation behavior"? Is it typical behavior of disruptive innovators? Does it demand an actual disruptive impact?)

Other items: 
The paragraph 2.1. should not be part of a methods chapter because the theories and research problem is what the methods chapter is building on when the research design is decided.  
Line 191: "Therefore" does not appear evident. What is the clear link here?
Line 218: "determines" should be "influences"...

All in all this is a well structured and interesting paper that needs some limited improvements to be ready for publication.

Author Response

Thank you for your suggestion. I will amend the introduction, and delete the vague parts. I will correct "macroeconomic impacts" to "government policy", and the content related to institutional theory will be further enriched. I'm sorry for the confusing use of "disruptive innovation" and "disruptive innovative behavior", and I will correct the vagueness of these expressions. When referring to the article structure setting of this journal, since there is no dedicated literature review section, the theory and hypothesis section is put into the second chapter as a compromise. I will continue to correct errors in the structure and data of other articles.

Reviewer 2 Report

1.       The paper identifies an area of opportunity: ......in current research on the impact of government on disruptive innovation because it is focusing on the impact of entrepreneurial characteristics or firm characteristics on disruptive innovation or the impact of disruptive innovation on regional economic development, neglecting the impact of macro-social and economic factors on disruptive innovation. The impact of macroeconomic factors on disruptive innovation has been neglected.....   But this paper plans to explore the impact of the government’s sustainable development policies on manufacturing enterprises. That is, the paper does not address the neglected area.

2.       The paper explains the concept of Institutional Theory, but it is necessary to add a section on empirical evidence, where the different variables and indicators that previous research has used from this framework of analysis are presented.

3.       Are the 170 firms representative for the sector? The paper does not have elements that confirm a representative statistical work that leads to a valid sampling.

4.       According to the explanation of the survey, entrepreneurs are the ones who answer if they have had a disruptive innovation, i.e., the survey measures perception. This can be very subjective. The paper does not have a statistical process to control this gap.

5.       The number of questionnaires answered was approximately 15% of the total number of questionnaires sent. Have you wondered if the enterprises that responded to the survey are mainly those that have had some approach to disruptive innovation? This also reflects an important gap in the analysis, as the paper leaves out of the analysis the local firms reality.

6.       What types of public policies are categorized as green development policies? It is important to mention some examples of green development policies that have been implemented by local governments. Especially in the cities where the firms are located. The paper just presents some national examples of electric cars. 

7.       Why is the emphasis on local government policies? Have federal government policies been compared to local government policies? What about the policies of other levels of government? How can we determine that green development policies from other levels of government have not had an impact on disruptive innovation in the firms analyzed?

8.       It seems that the econometric model did not perform the correct process with the categorical variables, for example, firm size and education. These variables should have more than one estimated coefficient, equal to the number of categories used. The econometric model is inconsistent.

Author Response

Response 1: In the latest revision, I have revised the vague statement, and the question aimed to address is precisely the impact of policy on disruptive innovation.

Response 2: Thanks for your correction, I have added variable selection in the theory and variable chapters of the article.

Response 3: I have updated the relevant data in Table 1 in the latest version of the article. Although the number of samples used in this paper is small, it covers various sub-sectors in the manufacturing industry on the whole. We have added a description of the sample industry distribution in Table 1. From the industry distribution, it can be seen that the vast majority of samples are distributed in the two sub-sectors of agricultural and sideline food processing industry and food manufacturing industry, which is similar to the industrial distribution in China. In China, food manufacturing is the largest segment of manufacturing. Of course, we also noticed that some high-precision manufacturing industries are missing from the sample, which is also related to the fact that our survey focuses on start-up companies. Usually high-precision manufacturing requires a lot of R&D and equipment-scale investment, which is difficult for start-up companies to do. In addition, based on the research questions of this paper, the environmental protection policy pressure faced by the high-end manufacturing industry is not as good as that of the traditional manufacturing industry. Therefore, the samples in this paper can be representative of Chinese start-up companies and can better reflect the research questions of this paper.

Response 4: How to measure disruptive innovation in empirical research has always puzzled scholars. In order to improve the accuracy of the measurement as much as possible, this paper cites the scale of Govindarajan and Kopalle. They argue that the strategic business unit of an enterprise is the main body of innovation, and the leaders of these units "were knowledgeable about the nature of innovations" (Govindarajan and Kopalle, 2006, p.191). Therefore, the definition of disruptive innovation in this paper also emphasizes the leaders' strategic deployment of enterprise innovation, rather than the final strategic result of the enterprise. The strategic results of disruptive innovation are also difficult to measure on a large scale, which is also explained in this article in limitations.

In order to avoid the homologous method bias, the independent variables in this paper are not obtained by questionnaires, and the moderating variable is also a relatively objective indicator. Therefore, the statistical conclusions of this paper can be considered robust to a certain extent.

Our discussion of the scale on page :

“This paper measures disruptive innovation by referring to the maturity scale developed by Govindarajan and Kopalle, answering five questions on a 5-point Richter scale, in-cluding “In the past five years, the firm has developed new products and services that are characterized by disruptive innovation,” “Firms rarely develop disruptive new products and services or adopt disruptive business models,” “Firms lag far behind their competitors in introducing disruptive innovations,” “In the past five years, firms have developed new products and services” or “Within the last five years, the firm has developed new products and services or adopted new business models that are highly attractive to different customer segments,” and “Within the last five years, the firm has developed new products and services that have attracted customers in the main-stream market over time because the new products and services meet the needs of customers in the mainstream market.” A score of 1 means very unlikely to meet, and 5 means very likely to meet.”

They tested the reliability and validity of the scale in the article, and concluded that the scale has good reliability and validity, and can effectively measure disruptive innovation. Similarly, we also tested the reliability and validity of our scale, we reported the reliability and validity of our scale on page :
“The reliability of the Disruptive Innovation Scale in this sample was 0.845, indicating good reliability. The results of the confirmatory factor analysis are also good, with the χ²-distribution less than 2, CFI value of 0.999 and RMSEA value of 0.030, indicating that the scale has good validity.”

Response 5:  According to the survey process of this article, we surveyed 1,117 entrepreneurs across the country in November 2018, including basic personal information and basic information about startup companies. At the same time, we re-visited the level of subversive innovation in the companies where these entrepreneurs work, and tracked 671 entrepreneurs in March 2019. The proportion of questionnaires returned was 60.07%, which is a relatively high level. However, the questionnaire survey in this paper is not aimed at start-up enterprises in the initial stage, but also includes many mature family-owned enterprises. In order to ensure the validity of the research, this paper removes the samples of enterprises that have been established for more than eight years to meet the characteristics of entrepreneurial enterprises, and obtains 285 valid sample data. The selected samples account for 42.47% of the questionnaires obtained from the return visit. Due to the particularity of the sustainable development policies and green development policies studied in this paper, this paper reduces the sample to 170 manufacturing companies, accounting for 59.65% of the start-up sample. Although from the conclusion, the samples selected this time only account for 15% of the total samples, we try to retain enough qualified samples at each step of sample screening.

From the point of view of the sample selection procedure, the sample deletion in this paper is not aimed at the innovation strategy of the enterprise, but aimed at the establishment age and distribution industry of the enterprise. Therefore, the program does not have an impact on the company's disruptive innovation strategy.
In addition, the questionnaire in this paper is a comprehensive questionnaire covering multiple strategic dimensions, not a questionnaire for disruptive innovation. The measurement of disruptive innovation strategy is only an indicator in the questionnaire. Therefore, in the process of collecting data, there will not be cases where entrepreneurs give up answers because they have not implemented disruptive innovations. This also greatly avoids the bias of sample selection.

Response 6: In the revised text, we have added sustainable development policy cases from local governments in different regions and for different industries.

Response 7: Generally speaking, in the Chinese context, central government policies only provide guidance to local governments at all levels. In the process of specific implementation, different regions will adjust the implementation of policies according to development differences and their own conditions, which is why we emphasize local government policies.
Generally speaking, the policies issued at the provincial level usually only convey the suggestions and instructions of the central government, while the governments at the county level and lower levels usually only assume the role of implementing policies and rarely have the power to directly formulate policies. Therefore, we choose the municipal government as the measurement object, because these policies have the most direct impact on the regional economy. A comparison and supplementary explanation of the different policies will be added in the text.

Response 8: Table 1 has been revised. Our evaluation of enterprise size is based on the logarithmic value of asset size. The number of people used is only to reflect the data distribution. Sorry for the misunderstanding, it has been deleted in the text.
References to relevant indicators of the Education level will be added.

 

 

Reviewer 3 Report

The study has explored the implications of government green development policy on disruptive innovation behaviour of firms. Overall, the flow of information and discussion reveals interesting theoretical insights for entrepreneurial organizations as well as government organizations. However, the following points should be taken into consideration from the methodological point of view in the revisions.

·      There is no representation (as illustration) of the theoretically constructed framework. An illustration of the framework helps to explain the theoretical connection between the study variables. For a reader it is difficult to understand the overall layout and flow of the research framework and hypothetical links.

·      The variables (measurement items) are not well explained and operationalized backed with the theory or literature support to establish them as measuring factors.

·      Not much explicit information and data is provided for the survey questionnaire. It is not clear how the questionnaire items were established, and the variables were measured.

·      Population and sample size calculation need statistical justification.

·      The conclusion is briefly written and needs more specific discussion on the importance of the study outcome, results generalizability and along with the future recommendations and limitations.

 

 

 

Author Response

Thanks for your suggestion, I will complement the construction of the theoretical framework with illustrations. In the Data and Methods section, I will add article citations from high-impact journals to enrich the selection of variables and the rationale for their operation.
In the Scale section, I have updated the data. According to the survey process of this article, we surveyed 1,117 entrepreneurs across the country in November 2018, including basic personal information and basic information about startup companies. At the same time, we re-visited the level of subversive innovation in the companies where these entrepreneurs work, and tracked 671 entrepreneurs in March 2019. The proportion of questionnaires returned was 60.07%, which is a relatively high level. However, the questionnaire survey in this paper is not aimed at start-up enterprises in the initial stage, but also includes many mature family-owned enterprises. In order to ensure the validity of the research, this paper removes the samples of enterprises that have been established for more than eight years to meet the characteristics of entrepreneurial enterprises, and obtains 285 valid sample data. The selected samples account for 42.47% of the questionnaires obtained from the return visit. Due to the particularity of the sustainable development policies and green development policies studied in this paper, this paper reduces the sample to 170 manufacturing companies, accounting for 59.65% of the start-up sample. Although from the conclusion, the samples selected this time only account for 15% of the total samples, we try to retain enough qualified samples at each step of sample screening.
Finally, I will enrich the conclusion section, including more discussion of the significance of the findings, as well as future research plans and research limitations of this paper.

In addition, we also used the population of the city where the enterprise is located as a control variable, and the conclusion has not changed. To save space, we attach the results from the robustness test in the appendix.

 

Author Response File: Author Response.pdf

Reviewer 4 Report

First of all, I would like to say to the authors that the chosen topic is quite interesting for the scientific and research field and it offers an alternative in the green development of the government and in innovation. In the same way I congratulate the authors because the percentage of plagiarism detected is relatively low as it is limited to 6% which denotes the authorship of the article by the authors in this sense there are several strengths of the article such as the practical and theoretical implications detailed in the article, the methodology used to carry out the analysis along with the development of the hypothesis as well as all the descriptive statistics and results provided therein. In addition, the development and definition of the variable used is quite clear to the reader because it is explained in a simple and easily understandable way.

 

However, the article could be improved in some aspects, such as the following:

In the introduction section, reference could be made to the part of the research in order to give the reader an initial idea of the structure of the article and to make it easier to understand.

 

Although the introduction provides a correct and detailed justification of the covered research gap supported by relevant bibliographical references, I would advise introducing an updated literature review section that includes bibliographical references to the main high-impact journals that analyse green government development within innovation. In addition, it would be interesting to look for work that supports the idea defended in the article in the journal sustanhability, since the aim is to publish this article in this journal and in the references used there is no allusion to any work published in this journal that deals with the subject matter defended in the article.

 

In the conclusions section, the objective of the research is clearly identified; however, I would advise starting this section by referring to the research gap covered as well as a brief justification of the importance of government policy on sustainable development at present, although the conclusions section refers to a possible future line of research, it does not refer to the limitations of this study, which would be interesting to cite so that the reader has an idea of the limitations of this research.

 

For the rest, I congratulate the authors and recommend a minor revision together with a new analysis of the same article before making a decision on its publication. 

Comments for author File: Comments.pdf

Author Response

Thanks for your suggestion, I will introduce the structure of the article in the updated introduction to the main body. In the literature review section, I will try my best to add high impact factor literature to enrich the review and try to supplement articles in the journal sustanhability. In the conclusion section, I will summarize the latest developments in the research question of this paper, and add limitations at the end of the paper.

Round 2

Reviewer 2 Report

Thank you for making the corrections.

As with all research, the process of improving the impact of the results is continuous. The document is now better

Author Response

Thanks for the endorsement, I will try to continue to improve this article.

Reviewer 3 Report

The authors have addressed the comments and subsequently improved the manuscript.  However, the conclusion of the research lacks some important discussion along with the limitations and future recommendations. 

 

Author Response

Thanks for your suggestions, I will try to continue to enrich the content of the "Discussion" section and the "Limitations and Future Research Directions" section

Reviewer 4 Report

Dear Author,

After reviewing the manuscript, they have made all the proposed modifications.

I recommend the publication of the manuscript in its current state.

Author Response

Thanks for the endorsement!