Small worldliness, Chinese culture, and firm innovation performance: an empirical study based on patent collaboration data of China

China is an Asian country that has a more collectivist culture compared with that of westerncountries. Furthermore, China is also different from other Asian countries and regions, forexample, Japan, South Korea, and Taiwan, in terms of the social and political context. Thesmall-world network thereby plays quite a different role in innovation in China. This paperexpands on the existing studies by examining the impact of the small-world network on firminnovation performance using both quantity and quality measurements. With the intra-firmlevel patent collaboration data from China, we find that a more clustered patentcollaboration network has a negative impact on firm innovation performance. Patentcollaboration networks with greater small worldliness would harm firm innovationperformance in China, which is quite different from the role played by small worldliness inwestern and other Asian countries. The path length has a negative impact, and the size ofthe connected component has a positive impact on firm innovation, which is similar to therole of small-world networks in western and other Asian countries. Our finding issuggestive to the firm managers who face the collectivist culture of China, which has greateremphasis on hierarchy and bureaucracy.