Innovation, learning, and exporting in China: Does R&D or a technology index matter?
AbstractThis paper undertakes econometric analysis of innovation, learning, and exporting in automobiles and electronics firms in China using a large-scale 2003 dataset to identify the most appropriate innovation proxy. Drawing on recent literature on innovation and learning in developing countries, it tests two alternative proxies: (i) a technology index (TI) to capture a variety of minor activities involved in using imported technologies efficiently; and (ii) the research and development (R&D)-to-sales ratio, which represents formal technological efforts to create new products and processes, often at world frontiers. A higher TI increases the probability of exporting in both industries, while the R&D-to-sales ratio was not significant. Foreign ownership, technical manpower, and the characteristics of the general manager/chief executive officer also matter. The findings suggest that China's remarkable success in the export of automobiles and electronics since initiating an open-door foreign direct investment (FDI) policy in 1978 is linked to technology transfer from multinationals; systematic investments in and upgrading of minor technological activities (like search, engineering, quality management and design); and human capital. As China's per capita income rises over time, however, formal R&D activities are likely to become more important to sustain competitiveness and technological upgrading in automobiles and electronics.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 23 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/asieco
Innovation; Technological capabilities; R&D; Exports; China;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
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