Do food processing firms in China innovate?

This paper explores firm R&D and product innovation in three food processing industries in China from 2005 to 2007. It is found that both R&D intensity and product innovation are at low levels in all three industries, while relatively the product innovation is at a higher level than the R&D intensity. Nevertheless, in the dimension of time trend, the product innovation does not display a clear upward time trend, while in contrast the R&D intensity appears to trend upwards. In addition, we further quantify the impacts of R&D and firm attributes on product innovation. We find that R&D can generate significantly positive impact, and firm size and exporting intensity generally exert positive impacts as well. Additionally, firm attributes have different impacts on firm product innovation in different industries. Given these findings, policies that encourage R&D, firm growth, and exporting are likely to result in achieving a higher level of product innovation. Besides, policies that are industry targeted will be more effective than policies of one fitting all