The driving process of technological innovation in construction: a firm-level CDM analysis

Purpose Innovation has been acknowledged as the key for modern industries. However, the construction industry is criticised for being poor in innovation performance compared to other industry sectors. Large construction firms are the main contributor to technological innovation in the construction industry, but the driving process of their technological innovation has not yet been fully investigated in previous studies. The purpose of this paper is to provide quantitative analysis of the technological innovation driving process of large construction firms. Design/methodology/approach An extended crepon, duguet and mairesse (CDM) model has been developed to analyse the key influencing factors for technological innovation in construction firms. The sample data are selected from the world's largest construction market, China, and include 129 listed construction firms. Findings The results show significant positive correlation between R&D investment and innovation output and also between innovation output and performance. The effect of influencing factors on the R&D investment, innovation output and performance are also revealed by the empirical study. The underlying reasons are discussed and suggestions are given for the construction industry to improve the technological innovation capacity of construction firms. Originality/value This research contributes to the literature of construction innovation and benefits practitioners by providing a quantitative approach to demonstrate the driving process of innovation in construction firms.