Abstract: Nowadays, the persistence of the innovation activities of Chinese firms is faced with severe challenges from both internal and external environmental changes. And the production and the division of labor in the modern economy are becoming more and more networking. As a result, using the enterprise trade networks to solve the innovation dilemma has been an important strategy to achieve the objective of innovative growth in China’s new development stage. This paper first constructs a model of enterprise trade network and peer innovation game, then it conducts an empirical test based on the supplier-customer trade network data of China’s listed companies from 2009 to 2013, so as to study the innovative peer effects in the enterprise trade network formed between the enterprises and their upstream and downstream partners. The findings show that the technological improvements of the partner enterprises in the enterprise trade networks have significantly promoted enterprise innovations, namely, there exist innovation peer effects in the enterprise trade networks. The major channel affecting the vertical partners is knowledge spillover, while the major channel affecting the horizontal partners is the competitive pressure. Further study reveals that the innovation peer effects in the enterprise trade networks have the high-order property, which is more significant in the samples of supplier vertical partners and in the samples of the horizontal partners of the shared customers, and that these effects will be enhanced with the improvements of the degree of marketization. Therefore, we should properly distribute the enterprise trade networks, establish the leading role of competition and market mechanism in resource allocation, and pay attention to the network spillover effects of related policies, so as to achieve the successful transformation from China-made to China-created.

Key words: innovation, peer effects, enterprise trade networks, reflection problem