Chinese Management Studies

Purpose – The purpose of the paper is to identify the main determinants of the development of the neighbourhood electric vehicle (NEV) industry in China, including influences from private stakeholders as well as the government, and domestic as well as foreign interest groups. Particular emphasis is placed on the role of state-owned enterprises (SOEs) and the relations between the government and the SOE sector.

Design/methodology/approach – The paper follows an inductive approach, and is largely based on interviews with industry actors and representatives for relevant government agencies, complemented with secondary data.

Findings – The preliminary findings suggest that unlike Western market economies, where the impact of public policy on innovation is relatively transparent and well recorded (in the form of fiscal and financial incentives and formal legislation), much of Chinese innovation is driven by less formal decisions taken in the nexus between SOEs and relevant state agencies. Hence, although China suffers no lack of legislation at various levels (including laws, decrees, and guidelines) it is often difficult to identify the specific drivers for change.

Practical implications – The findings are useful for understanding the development of the NEV industry in China.

Originality/value – The current paper is the first application of the GIST (Governance of Innovation towards Sustainability Technology) framework to the case of the Chinese NEV industry.