Learning from innovation award winners? Technology spillovers and firm innovation

Innovation is a vital output of knowledge resources, significantly enhancing firms' competitive advantages. Faced with outstandingly innovative competitors, firms may experience technology spillovers driven by the pressure of technological updating, thereby stimulating innovation. Based on data from Chinese listed firms from 2011 to 2019, we explore firms' reactions to innovation award winners within their product boundaries. The results indicate that firms encountering award-winning competitors experience heightened technology spillovers initiated by these outstanding peers. Unlike residual technology spillovers, award-driven technology spillovers actively promote firms' innovation activities and incentivize investment in knowledge resources. We further identify two primary channels of technology spillovers: competition and information. Under the competition channel, factors such as competitive pressure, market concentration, and market performance shape firms' responses to competitors' innovation awards. Regarding the information channel, the influence of competitors' technological advancements is more significant for firms with more politically connected competitors, non-stated-owned ownership, and those in a follower position. The findings underscore the critical role of innovation award winners in driving firm innovation.