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On the Relationship between Innovation Activity and Manufacturing Upgrading of Emerging Countries: Evidence from China

Author

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  • Zhong Xie

    (Hefei University of Technology, Hefei 230601, China)

  • Guixue Zang

    (Hefei University of Technology, Hefei 230601, China)

  • Feifei Wu

    (Hefei University of Technology, Hefei 230601, China)

Abstract

Most research into the relationship between innovation activity and manufacturing upgrading has been conducted in developed economies, such as the countries of North America and Europe. Due to the non-replicability of the developed countries’ development modes, most emerging countries cannot directly copy the manufacturing upgrading path of the developed countries. However, knowledge about the relationship between innovation activity and manufacturing upgrading in emerging economies remains limited. This paper sheds light on the relationship between innovation activity and manufacturing upgrading in emerging countries from the following three types of innovation, namely, technical innovation, product innovation, and institutional innovation. By using data from Chinese provinces for the period 2001–2015, this paper empirically investigates the relationship between innovation activity and manufacturing upgrading in emerging countries. The results show that technical innovation, product innovation, and institutional innovation have significantly positive driving-force effects on manufacturing upgrading, which indicates that innovation is an important source of promoting manufacturing upgrading for emerging countries. Moreover, the effect above is more prominent for technical innovation. The results are resilient to the alternative indicators of innovation and the alternative indicators of manufacturing upgrading. This paper provides a theoretical and empirical reference for conducting innovation-incentive policy and promoting the optimization of manufacturing structure.

Suggested Citation

  • Zhong Xie & Guixue Zang & Feifei Wu, 2019. "On the Relationship between Innovation Activity and Manufacturing Upgrading of Emerging Countries: Evidence from China," Sustainability, MDPI, vol. 11(5), pages 1-19, March.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:5:p:1309-:d:210345
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