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This work explores the dynamics of the 'virtuous circle' driving the impressive Chinese catching-up and growth by investigating the micro relationships linking productivity, profitability, investment and growth, based on China's manufacturing firm-level dataset over the period 1998-2007. Interestingly and somewhat puzzlingly, we find that productivity variations, rather than relative levels, are the prevalent productivity-related determinant of firm growth. Moreover, the direct relation between profitability and firm growth is much weaker and its contribution to the explanation of the different rates of firm growth is almost negligible. The only visible profitability-growth relationship is mediated via investment. Firm's contemporaneous and lagged profitabilities display positive and significant effect on the probability to report an investment spike, and, in turn, investment activities are related to higher firm growth.

While most studies have viewed strategic flexibility as a capability to cope with the environmental turbulence and promote the product innovation, few of them investigate the mediating mechanism in the relationship between the strategic flexibility and product innovation. According to the resource-based view, we regard the bricolage as a concrete activity of recombining the different resources in the product development process and explore the underlying mechanism. Our results reveal that strategic flexibility has a positive and significant effect on bricolage. The effect of strategic flexibility on product innovation is partially mediated by bricolage. Furthermore, environmental turbulence moderates the relationship between strategic flexibility and bricolage positively. We contribute to the strategic flexibility research by exploring the effect of strategic flexibility on the bricolage and product innovation form a mediating perspective and offering a more nuanced and in-depth understanding of the impact of strategic flexibility. This research also provides new evidence on the effect of strategic flexibility on product innovation in transition economies such as China, where strategic flexibility is essential for firms to adapt to an uncertain environment.

This paper combs the landscapes of China’s technological innovation practice during the 40 years of reform and opening up, and describes it as “Four-Stage Climbing” that is, “Learning–Introducing–Supplying Stage” (LIS Stage), “Introducing–Imitating–Improving Stage” (III Stage), “Integrating–Boosting–Creating Stage” (IBC Stage), and the “Innovating–Iterating–Promoting Stage” (IIP Stage). It also explains the background of each stage and its specific innovation model. Furthermore, the paper emphasizes the main features, basic experiences and main lessons of China’s technological innovation practice during the past 40 years. This paper demonstrates that with the deepening of innovation-driven development, especially in the field of “Innovation Leads Development” which is valued by the country and industry, at this stage, it is urgent to pay closer attention to the following issues: first of all, the possible changes in mechanisms of international innovation competition and cooperation under the background of potential reconstruction for international governance; secondly, the occurrence and realization mechanism of Leading Scientific and Technological Innovation in the era of science and technology, as well as the structural and institutional mechanisms of the national innovation ecosystem, and also the ecological niche in which the future scientific innovation subject and technological innovation subject should be in the national innovation ecosystem; furthermore, the mechanism of innovation and development for “science-based industries”; last but not the least, the logical construction of innovation and development research under the Chinese context.