Impact of University agricultural research and development spillovers on Chinese agribusiness firms’ performance

by Yi Wang, Danni Yu

The spillover effect of university-based agricultural research and development (R&D) has been recognized as a crucial factor contributing to the enhanced performance of the agricultural industry. Nonetheless, the psychological impact of organizational inertia on individuals and groups may shape the influence of such spillovers for agribusiness firms. To date, there has been limited exploration of the interplay between university agricultural R&D spillovers and agribusiness firms. Utilizing panel data from Chinese listed agribusiness firms between 2009 and 2019, our empirical investigation reveals a negative short-term relationship between university agricultural R&D spillovers and agribusiness firm performance due to the similarity in knowledge backgrounds. In the short term, organizational inertia, stemming from familiar and parallel knowledge, renders university agricultural R&D spillovers unfavorable to agribusiness firm performance, thereby reducing their value to the enterprises. Conversely, the long-term influence of university agricultural R&D spillovers on agricultural enterprise performance is positive, as organizational inertia dissipates over time. Additionally, our findings indicate that university non-agricultural R&D spillovers serve to positively moderate the relationship between agricultural R&D spillovers and agribusiness firm performance in the short term, while exerting a negative moderating effect in the long term. Lastly, our analysis reveals a negative correlation between the effect of university agricultural R&D spillovers and the geographical distance between agribusiness firms and universities. This suggests that proximity to academic institutions may play a role in shaping the impact of R&D spillovers on agribusiness performance. In summary, our study highlights the complex dynamics between university agricultural R&D spillovers and agribusiness firm performance, revealing both short-term and long-term effects. We also underscore the importance of considering the influence of organizational inertia and the moderating role of non-agricultural R&D spillovers. Understanding these relationships is crucial for informing strategic decisions and fostering innovation within the agricultural industry.