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Product cycle theory and telecommunications industry--foreign direct investment, government policy, and indigenous manufacturing in China

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  • Tan, Zixiang Alex

Abstract

Focusing on China's telecommunications manufacturing sector, this paper first reviews the major theoretical positions regarding the impacts of foreign direct investment (FDI) and the relevance of product cycle theory. The paper then discusses how the Chinese government formulates its policy and regulations regarding FDI, and how it integrates its FDI policy with its industrial policy in the telecommunications manufacturing sector. Taking the manufacturing of central office switches as a special case and the telecommunications manufacturing sector as a broad case, the paper examines the interaction among government policy, FDI, and the indigenous manufacturing industry in the past 20 years. Based on the findings, this paper proposes a dynamic adding-and-downgrading model that explores the interaction between FDI investors and host developing nations and enriches the current product cycle theory.

Suggested Citation

  • Tan, Zixiang Alex, 0. "Product cycle theory and telecommunications industry--foreign direct investment, government policy, and indigenous manufacturing in China," Telecommunications Policy, Elsevier, vol. 26(1-2), pages 17-30, February.
  • Handle: RePEc:eee:telpol:v:26:y::i:1-2:p:17-30
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    Citations

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    Cited by:

    1. Mu, Qing & Lee, Keun, 2005. "Knowledge diffusion, market segmentation and technological catch-up: The case of the telecommunication industry in China," Research Policy, Elsevier, vol. 34(6), pages 759-783, August.
    2. Yu, Jiang & Zhang, Yue & Gao, Ping, 2012. "Examining China's technology policies for wireless broadband infrastructure," Telecommunications Policy, Elsevier, vol. 36(10), pages 847-857.
    3. Georg Erber & Harald Hagemann, 2008. "Die Rolle staatlicher Institutionen in asiatischen Innovationssystemen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 77(2), pages 95-112.
    4. Xia, Jun, 2017. "China’s telecommunications evolution, institutions, and policy issues on the eve of 5G: A two-decade retrospect and prospect," Telecommunications Policy, Elsevier, vol. 41(10), pages 931-947.
    5. Hong, Yu & Bar, François & An, Zheng, 2012. "Chinese telecommunications on the threshold of convergence: Contexts, possibilities, and limitations of forging a domestic demand-based growth model," Telecommunications Policy, Elsevier, vol. 36(10), pages 914-928.
    6. Kingsley E. Haynes & Lei Ding, 2006. "Technology, Innovation and Latecomer Strategies: Evidence from the Mobile Handset Manufacturing Sector in China," ERSA conference papers ersa06p17, European Regional Science Association.

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