Impacts of informal networks on innovation performance: evidence in Shanghai

This paper aims to present an empirical study on how informal networks affect innovation performance of firms in Shanghai. This study is a preliminary attempt to understand the effect of informal networks on innovation performance. Shanghai is selected as the region for data acquisition due to a prominent economic role in China. It is specifically to answer the research question regarding the impact of Chinese informal social network on innovation performance (in Shanghai).

This paper attempts to explore the quantitative effect of informal networks on innovation performance in regard to group behavioural characteristics among executives in China.

A total of 1,000 executives were invited, and there were 315 valid samples returned. Significant correlations are noted in key network variables against innovation performance. The results and findings generally support the hypotheses that “Education”, “Business Referral” and “Experience” are three core constructs exerting substantial influence in innovation performance. However, it is interesting to note that the connectivity and size of informal networks do not matter. Informal networks show no significant influence on innovation performance.

This indicates stereotypes in Shanghai social business networks prioritizing on highly educated acquaintances, referral activities and working experiences.

This study explores uncovered territory in organization innovation regarding the infiltration of informal networks, particularly in Chinese communities. Though the research context is Shanghai, the effect of informal networks on innovation performance can be extrapolated to other Chinese societies, such as Taiwan and Hong Kong.