Does organizational learning lead to higher firm performance? An investigation of Chinese listing companies

The purpose of this paper is to develop a framework for studying organizational learning, firm innovation and firm financial performance.

This paper examines the effects of organizational learning on innovation and performance among 287 listed Chinese companies.

The results indicate a positive association between organizational learning dimensions and firm performance (both objective financial performance and perceptual innovation measure).

The sample includes only firms for which secondary data are available. Different results might have been obtained if we include smaller, private firms into the sample. This paper only includes a limited number of measures of financial performance to assess the relationship between organization learning dimensions and firm performance. Therefore, researchers are encouraged to test the proposed propositions further with different performance measures.

The results showed that it is the combination of several learning characteristics and not a single dimension that influenced the variance of firm performance. The findings reinforce the notion that systemic interventions that address a variety and different combinations of learning organization characteristics will be more likely to be successful than interventions that solely focus on singular or a limited number of dimensions.

The integration of objective measures of firms’ financial performance with perceptual survey data represents a unique methodology that has not been widely used in the organizational learning literature. The positive correlations between the eight learning dimensions and the measures of firms’ performance lend credence to the efficacy of the organizational learning concepts.