Sources of External Technology, Absorptive Capacity, and Innovation Capability in Chinese State-Owned High-Tech Enterprises

Summary This paper examines the pattern of innovation and learning among state-owned enterprises in Chinese high-tech sectors and empirically estimates the impact of three types of investment for acquiring technological knowledge--in-house R&D, importing foreign technology, and purchasing domestic technology--on the innovation capabilities of firms. Based on a panel dataset consisting of 21 high-tech sectors during the period 1995-2004, an augmented knowledge production function is estimated. The results show that importing foreign technology alone does not facilitate innovation in Chinese state-owned high-tech enterprises, unless in-house R&D is also conducted. Domestic technology purchases, however, are found to have a favorable direct impact on innovation, suggesting that firms have less difficulty in absorbing domestic technological knowledge than utilizing foreign technology and that absorptive capacity is contingent upon the source or nature of the external knowledge.

[1]  Éric Archambault,et al.  Methods for using patents in cross-country comparisons , 2002, Scientometrics.

[2]  Zvi Griliches,et al.  R&D, Patents, and Productivity , 1981 .

[3]  Zvi Griliches,et al.  Patents and R&D: is There a Lag? , 1984 .

[4]  Kamal Saggi,et al.  Multinational Firms and Technology Transfer , 1999 .

[5]  Z. Griliches,et al.  Patents and R and D: Is There a Lag? , 1986 .

[6]  P. Lin,et al.  Spillover Effects of FDI on Innovation in China: Evidence from the Provincial Data , 2003 .

[7]  L. Anselin,et al.  Patents and innovation counts as measures of regional production of new knowledge , 2002 .

[8]  Rakesh Basant,et al.  The Effects of R&D, Foreign Technology Purchase, and Domestic and International Spillovers on Productivity in Indian Firms , 1996 .

[9]  A. Amsden.  Asia's Next Giant: South Korea and Late Industrialization , 1991 .

[10]  Elhanan Helpman,et al.  International R&D spillovers , 1995 .

[11]  Xiaohui Liu,et al.  Does foreign direct investment facilitate technological progress?: Evidence from Chinese industries , 2003 .

[12]  Michele Cincera.  Patents, R&D, and technological spillovers at the firm level: Some evidence from econometric count models for panel data , 1997 .

[13]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[14]  Albert G Z Hu,et al.  FDI Impact and Spillover: Evidence from China's Electronic and Textile Industries , 2002 .

[15]  Jacques Mairesse,et al.  Exploring the Relationship between R&D and Productivity in French Manufacturing Firms , 1992 .

[16]  Z. Griliches.  Patent Statistics as Economic Indicators: a Survey , 1990 .

[17]  Alice H. Amsden,et al.  Asia's next giant , 1989 .

[18]  G. Grossman,et al.  Innovation and growth in the global economy , 1993 .

[19]  W. W. Muir,et al.  Regression Diagnostics: Identifying Influential Data and Sources of Collinearity , 1980 .

[20]  Megan J. MacGarvie.  Do Firms Learn from International Trade? , 2006, Review of Economics and Statistics.

[21]  W. Diebold,et al.  Asia's Next Giant: South Korea and Late Industrialization , 1990 .

[22]  A. F. J. van Raan,et al.  Handbook of quantitative studies of science and technology , 1988 .

[23]  J. Schumpeter.  Capitalism, Socialism and Democracy , 1943 .

[24]  Bruno Crépon,et al.  estimating the innovation function from patent numbers: gmm on count panel data ¤ , 1997 .

[25]  Stephen J. Redding,et al.  Mapping The Two Faces Of R&D: Productivity Growth In A Panel Of OECD Industries , 2000 .

[26]  Lu Feng.  Thinking about the Strategy of Developing China's Civilian Aircraft Industry , 2005 .

[27]  Zvi Griliches,et al.  Issues in Assessing the Contribution of Research and Development to Productivity Growth , 1979 .

[28]  Xibao Li,et al.  In-house R&D, technology purchase and innovation: empirical evidences from Chinese hi-tech industries, 1995-2004 , 2010, Int. J. Technol. Manag..

[29]  K. Zhang,et al.  How does foreign direct investment affect economic growth in China , 2001 .

[30]  David Wield,et al.  Managing R&D in technology-followers , 2000 .

[31]  A. Arora,et al.  Markets for Technology and Their Implications for Corporate Strategy , 2000 .

[32]  Shujie Yao,et al.  On economic growth, FDI and exports in China , 2006 .

[33]  Xiaohui Liu,et al.  Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries , 2007 .

[34]  Pravin K. Trivedi,et al.  Regression Analysis of Count Data , 1998 .

[35]  Daniel A. Levinthal,et al.  Innovation and Learning: The Two Faces of R&D , 1989 .

[36]  Jeffrey L. Furman,et al.  The Determinants of National Innovative Capacity , 2000 .

[37]  Sandra Poncet,et al.  FDI in Chinese Cities: Spillovers and Impact on Growth , 2007 .

[38]  Richard Kneller,et al.  Frontier Technology, Absorptive Capacity and Distance , 2002 .

[39]  Xielin Liu,et al.  Comparing innovation systems: a framework and application to China’s transitional context , 2001 .

[40]  Zvi Griliches,et al.  Productivity and R and D at the Firm Level , 1981 .

[41]  G. Jefferson,et al.  R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry , 2003 .

[42]  David B. Audretsch,et al.  Innovation in Large and Small Firms: An Empirical Analysis , 1988 .

[43]  Richard Blundell,et al.  Individual effects and dynamics in count data models , 2002 .

[44]  Xielin Liu,et al.  The relative contributions of foreign technology and domestic inputs to innovation in Chinese manufacturing industries , 1997 .

[45]  Z. Griliches,et al.  Econometric Models for Count Data with an Application to the Patents-R&D Relationship , 1984 .

[46]  A. Jaffe.  Technological Opportunity and Spillovers of R&D: Evidence from Firms&Apos; Patents, Profits and Market Value , 1986 .

[47]  G. Jefferson,et al.  Returns to research and development in Chinese industry: Evidence from state-owned enterprises in Beijing , 2004 .

[48]  Daniele Archibugi,et al.  Patenting as an indicator of technological innovation: a review , 1992 .

[49]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[50]  S. Girma.  Absorptive Capacity and Productivity Spillovers from FDI: A Threshold Regression Analysis , 2005 .