Empirical analysis of the impact of open innovation on total factor productivity of enterprises based on the multiple fixed effects model

Abstract

This study employs a multiple fixed effects model, which accounts for time, individual, and industry-specific factors, to investigate the impact of open innovation on total factor productivity (TFP) in firm. By conducting an empirical analysis of panel data from A-share listed companies in the Shanghai and Shenzhen stock exchanges from 1999 to 2022, this research reveals the crucial role of open innovation in promoting high-quality development in enterprises. By constructing a model that incorporates time, individual, and industry fixed effects, we control for unobservable heterogeneity factors, ensuring the robustness of our estimation results. The findings indicate that open innovation has a significant positive impact on firms’ total factor productivity (TFP) (p < 0.01), with the effect being more pronounced in firms with low growth capabilities and low liquidity ratios. Additionally, this study explores the role of research and development (R&D) intensity and return on assets (ROA) as mediating variables, finding that R&D intensity plays a positive mediating role between open innovation and high-quality development in firms, while ROA may have a negative impact on high-quality development in the short term. This research not only validates the relationship between open innovation and high-quality development in firms but also provides a new perspective on how open innovation affects firm productivity through different mechanisms, offering theoretical support and practical guidance for firms and governments in formulating innovation strategies.