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Purpose

Intangible resources (IRs) play an important role in enterprise innovation; previous studies find inconsistent results (positive and negative). The authors develop and test a framework to analyze IRs to see whether and how to impact firm innovation performance to reconcile the conflicting results.

Design/methodology/approach

This study empirically examined the curvilinear effect of IRs and innovation performance (IP) based on data from the Annual Census of Chinese Industrial Enterprises. The moderating effect of institutional development (ID) and state ownership (SO) in the relationship between firms' IRs and IP was also examined.

Findings

It was found that there is a U-shaped relationship between IRs and IP. Moreover, the institutional development weakens the U-shaped relationship.

Originality/value

The U-shaped relationship explains the inconsistent results in previous studies. It offers some important implications for managers and policymakers, who must understand the role of IRs.

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