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China’s prospects as an innovative country: an industrial economics perspective

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  • Yu, J.

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Nijkamp, P.

Abstract

The recently announced Independent Innovation Strategy (IIS) signifies the climax of China’s technology catch-up effort during the past 30 years. This paper investigates the efficacy of, and prospects for this effort by reviewing comments from the relevant literature, by conducting a theoretical analysis based on industrial economics and by testing hypotheses with the latest empirical evidence. Our results suggest a bleak prospect for IIS if the Chinese government retains its excessive administrative protection of state-owned enterprises, and a long struggle ahead for China to finally push further into the technology frontier.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0009.

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Date of creation: 2008
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Handle: RePEc:vua:wpaper:2008-9

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Keywords: state monopoly; R&D; independent innovation; state-owned enterprise;

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  1. Ran, Jimmy & Voon, Jan P. & Li, Guangzhong, 2007. "How does FDI affect China? Evidence from industries and provinces," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 774-799, December.
  2. Mattlin, Mikael, 2007. "The Chinese government's new approach to ownership and financial control of strategic state-owned enterprises," BOFIT Discussion Papers 10/2007, Bank of Finland, Institute for Economies in Transition.
  3. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
  4. Alwyn Young, 2000. "The Razor'S Edge: Distortions And Incremental Reform In The People'S Republic Of China," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1091-1135, November.
  5. David S. Landes, 2006. "Why Europe and the West? Why Not China?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 3-22, Spring.
  6. William J. Baumol, 2004. "Entrepreneurial Enterprises, Large Established Firms and Other Components of the Free-Market Growth Machine," Small Business Economics, Springer, vol. 23(1), pages 9-21, 08.
  7. Bai, Chong-En & Xu, Lixin Colin, 2005. "Incentives for CEOs with multitasks: Evidence from Chinese state-owned enterprises," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 517-539, September.
  8. Liu, Zhiqiang, 2002. "Foreign Direct Investment and Technology Spillover: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 579-602, September.
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