Can Innovation Incentive Policies Improve the Innovation Performance of Knowledge Workers? Evidence from Chinese State-Owned Enterprises

Abstract

Innovation by knowledge workers is the foundation of sustainable development within an organization. Chinese policy makers use various innovation incentive policies to improve the innovation performance of knowledge workers at state-owned enterprises, which is in line with China’s goal of becoming an “innovative country”. This study compares the impacts of incentive policies issued by the central government, by local governments, and at the enterprise level (vertical dimension) and examines the effectiveness of varying policy content (horizontal dimension). The mechanism by which policy supply influences the innovation performance of knowledge workers at state-owned enterprises is theoretically analyzed, and empirical tests based on 1857 samples from field research are then conducted. The results show that incentive policies at each vertical level and each horizontal content level have a significant positive effect on the innovation performance of knowledge workers at state-owned enterprises, although the effects vary. The findings indicate that, along the vertical dimension, local government incentive policies are most effective. Along the horizontal dimension, salary and honor incentive policies are the most impactful. Policy providers should consider the differences in the effects of various innovation incentive policies to formulate relevant incentive policies to improve the innovation performance of state-owned enterprise knowledge workers.