Shadow of the great firewall: The impact of Google blockade on innovation in China

• DOI: http://doi.org/10.1002/smj.3179
• Author: Qinyu (Ryan) Wang,Yanfeng Zheng
• Published date: 01 December 2020
• Date: 01 December 2020

RESEARCH ARTICLE

Shadow of the great firewall: The impact of

Google blockade on innovation in China

Yanfeng Zheng | Qinyu (Ryan) Wang

Faculty of Business and Economics,

University of Hong Kong, Pokfulam,

Hong Kong

Correspondence

Yanfeng Zheng, Faculty of Business and

Economics, University of Hong Kong,

Pokfulam, Hong Kong.

Email: yz2010@hku.hk

Funding information

Research Grants Council of the Hong

Kong Special Administrative Region,

Grant/Award Number: 17505019

Abstract

Research summary: Building on the search-based

view of innovation, we develop a framework regarding

how Google guides innovative search behavior. We

exploit an exogenous shock, China's unexpected block-

ade of Google in 2014, and adopt a difference-in-differ-

ences approach with a matched sample of patents from

China and nearby regions to test our predictions. Our

analyses show that the blockade negatively affected

inventors in China to search distantly in technological

and cognitive spaces compared to those in the control

group who were presumably unaffected by the event.

The impact was less severe for inventors with larger

collaboration networks but became more pronounced

in technological fields proximate to science. Our find-

ings contribute to innovative search literature and

highlight the theoretical and practical importance of

Internet technologies in developing valuable

inventions.

Managerial summary: Inventors nowadays depend

heavily on Internet search to access information and

knowledge. They therefore become vulnerable to bar-

riers imposed on their online search. In this study, we

find that China's unexpected blockade of Google and

its affiliated services altered the searching behavior of

inventors in China such that they became less able to

seek distant knowledge. This impact was further con-

tingent on the availability of offline knowledge chan-

nels and the reliance of each technological field on

Received: 28 November 2018 Revised: 6 February 2020 Accepted: 7 February 2020 Published on: 8 July 2020

DOI: 10.1002/smj.3179

2234 © 2020 John Wiley & Sons, Ltd. Strat Mgmt J. 2020;41:2234–2260.wileyonlinelibrary.com/journal/smj

science. We also find that the economic value of their

inventions decreased due to the blockade. Our findings

reveal a neglected but consequential aspect of Internet

censorship beyond the commonly found media effect

and offer important implications to practitioners and

policymakers.

KEYWORDS

Google, innovation, recombinant search, distant search, Internet

censorship

1|INTRODUCTION

On June 1, 2014, millions of Internet users in China were suddenly unable to access Google, the

world's leading search engine. Any visit from China to the search engine or its affiliated services

resulted in a domain error. Although it was speculated as only a temporary one, the blockade

has lasted more than 5 years and continues today (Google, 2019). While some expect that it per-

haps impacted only public opinions because direct access to scientific and technological infor-

mation through specific websites or databases remained unaffected, others speculate that such

an event could be consequential for innovation since Google was once widely used by scientists

and researchers in China to seek business information and scientific knowledge (Qiu, 2010).

From a conceptual perspective, prior studies largely view the Internet and related technolo-

gies as tools that reduce the cost of information access or interpersonal coordination (Ding,

Levin, Stephan, & Winkler, 2010). Such a conceptualization, however, cannot adequately

explain why the loss of Google mattered so much since the knowledge contents were still avail-

able online and all coordination tools such as video calls remained intact or even improved. For

example, our analyses reveal that the economic value of inventions from China dropped by

around 8% or USD57K after the event compared to those from nearby unaffected regions.

Together, it is conceptually intriguing and practically meaningful to examine why and how the

unexpected blockade of Google in China affected the knowledge seeking behavior of inventors

in China and their innovative outcome.

Building on the insights gathered from the search-based view of innovation and cognitive

psychology studies on the Internet, we develop a conceptual framework of Google-enabled

online search. We contend that Google and its affiliated services both extend human memory

and enhance the ability of inventors to access, digest, and assimilate unfamiliar and

unnoticeable knowledge. It therefore helps inventors to overcome the local search tendency,

extending their search distance in technological and cognitive spaces. We further argue that this

online knowledge channel and traditional offline channels such as inventor collaboration net-

works are substitutes, such that offline channels can compensate for the unavailability of Goo-

gle. In addition, the effect of online search becomes more pronounced in technological fields

that are proximate to science since Google-enabled search is particularly helpful for inventors

to seek and apply scientific knowledge to guide their distant search in these fields.

Exploiting China's unexpected blockade of Google in 2014, we test our predictions using pat-

ents as innovation outcomes with a difference-in-differences (DiD) approach. We also match

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