Formation Mechanism of Innovation Chain: How Do Innovation Subjects and Support Subjects Cooperate?
Abstract
Despite extensive research on knowledge spillovers, existing literature has paid limited attention to the formation mechanism of innovation chains. To address this gap, this paper constructs a multi-party evolutionary game model including two innovators and one supporter, incorporating knowledge spillover effects, and empirically tests the theoretical predictions using data from Chinese listed companies (2016–2025). The results show that the final equilibrium is (cooperation, cooperation, support). Empirically, we find a nonlinear relationship between knowledge spillover and the formation mechanism of an innovation chain with a double threshold effect of absorptive capacity: the positive impact of spillover increases as capacity moves from low to moderate, but diminishes-while remaining positive-when capacity becomes excessively high, revealing an S-shaped pattern. The originality lies in two aspects. Theoretically, our multi-player model extends the conventional bilateral framework to better reflect real-world parallel collaboration. Empirically, our firm-level analysis of Chinese listed companies is among the first to identify a double threshold effect, moving beyond regional-level or single-threshold studies. Practically, our findings suggest that governments should tailor subsidy intensities to firms’ absorptive capacity levels—allocating more to moderate-capacity firms where spillover gains are maximized—offering a more precise strategy for promoting sustainable innovation chain development.