Why is it that most Chinese companies are obsessed with learning and imitation and that their own innovation is generally inadequate? Based on the questionnaire survey data of the World Bank $time in China

the paper investigates the impact of grey competition from the informal sector on enterprise innovation deci- sion-making. Studies have shown that the existence of the informal sector and its grey competition behavior have indeed inhibited the independent innovation of formal enterprises

prompting them to turn more to imitation

but cooperative innovation has not been significantly negatively affected. Further studies have found that the inhibi- tion of informal competition on corporate innovation is more severe in areas where the burden of regulation is heavy

and in areas where resources are abundant or intellectual property rights are protected.