Role of Educational Level in Innovation Performance: An Exploration Study of Higher Education Graduates in China

Innovation plays a vital role in societal and economic development, with human capital being a key driver for innovation by the development and absorption of new knowledge. However, there is a lack of research on the role of human capital with different levels of higher education (i.e., tertiary, master’s, and doctoral levels) in innovation performance. Therefore, this paper proposes a two-stage Data Envelopment Analysis-Stochastic Frontier Analysis (DEA-SFA) method to examine the relationship between human-capital education level and innovation efficiency. In the first stage, DEA is used to acquire separate innovation efficiency scores for each decision-making unit (i.e., organization possessing human capital). In the second stage, SFA is utilized to estimate the impact of human-capital educational level on innovation efficiency. The empirical results show a surprising U-shaped relationship between human-capital education level and innovation efficiency, and we find that human capital with a tertiary level have a more positive effect than that with a master’s level. In addition, this study finds that innovation intermediaries show a moderating role in the relationship between human-capital educational level and innovation efficiency. This study offers implications for both policymakers and managers on how to cultivate and recruit suitable human capital for higher innovation performance.