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The transition from imitation to innovation: An enquiry into China's evolving institutions and firm capabilities

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  • Dobson, Wendy
  • Safarian, A.E.

Abstract

How is the Chinese economy making the transition from imitation to innovation as the source of sustained long-term growth? We address this question using the evolutionary approach to growth in which institutions support technical advance and enterprises develop capabilities to learn and innovate. Growth is seen as a series of disequilibria in which obstacles to innovation such as outdated institutions and weak incentive systems can cause growth to slow. We review existing literatures on institutions and firm behavior in China and compare these findings with those of our survey of Chinese firms in 2006. Industry and firm studies in the literature show how productivity is rising because of firm entry and exit rather than the adoption of new technologies. A striking feature both of the studies in the literature and our survey is the increasing competitive pressures on firms that encourage learning. Our survey of privately owned small and medium enterprises in five high-tech industries in Zhejiang province found a market-based innovation system and evidence of much process and some product innovations. These enterprises respond to growing product competition and demanding customers with intensive internal learning, investment in R&D and a variety of international and research linkages.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 19 (2008)
Issue (Month): 4 (August)
Pages: 301-311

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Handle: RePEc:eee:asieco:v:19:y:2008:i:4:p:301-311

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Web page: http://www.elsevier.com/locate/asieco

Related research

Keywords: China Technological capabilities of firms Transition to innovation economy;

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Cited by:
  1. He, Xiyou & Mu, Qing, 2012. "How Chinese firms learn technology from transnational corporations: A comparison of the telecommunication and automobile industries," Journal of Asian Economics, Elsevier, vol. 23(3), pages 270-287.
  2. Zhang, Han & Patton, Donald & Kenney, Martin, 2013. "Building global-class universities: Assessing the impact of the 985 Project," Research Policy, Elsevier, vol. 42(3), pages 765-775.
  3. Shang, Qingyan & Poon, Jessie P.H. & Yue, Qingtang, 2012. "The role of regional knowledge spillovers on China's innovation," China Economic Review, Elsevier, vol. 23(4), pages 1164-1175.

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