An Institutional-Based View of Innovation - An Explorative Comparison of Business Groups in China and India

The aim of this explorative study is to compare the innovation performance of business groups in China and India in order to identify their distinctive local innovation dynamics. Data collection mainly relied on two sources: The world's 142 countries ranked by the Global Innovation Index Report (2013) which provides information about the countries' institutional settings and the Joint Research Centre Database listing the world's top firms ranked by their investments in Research and Development from which we gathered information about the business groups. From the findings, it emerges that not only that China overperforms India in relation to all the Innovation Indexes but that their distinctive institutional environments tend to favour very different dynamics of innovation. More precisely, while China's regulatory environment tends to support a more conservative approach of business groups towards investments in traditional sectors, India's lack of infrastructures coupled by a more efficient regulatory environment tend to support more resourceful and creative approach. These different approaches also shape the geographical distribution of business groups' innovation performance in the two countries.