Imitation or innovation to enhance the performance: an empirical investigation of 258 Chinese firms

This paper is focused on the factors which determined the adoption of innovation or imitation strategies on firm performance in seven different industries in China. Firstly, we delineate and distinguish the concepts of innovation and imitation. Secondly, using the structural equation modelling method, we empirically test the impact of two dimensions of market and entrepreneurial orientations, on the decision to innovate or to imitate. Thirdly, we relate this decision to the company's performance. Based on a survey of 535 companies, 258 responded, our empirical results support the view that proactivity is the most important determinant in deciding whether to innovate or imitate, and we find that the company's performance is not determined by the decision to innovate or imitate, but rather, by the company's proactivity and focus on customers.