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The Role of Small Firms in the Technology Development of China


  • Fredrik Sjöholm
  • Nannan Lundin


Abstract Science & Technology (S&T) is high on the Chinese policy agenda and the country aims at becoming an innovation-driven economy. Small firms have been important in technology development in other East Asian countries but the situation in Chinese small firms has been far less explored. We examine how much S&T has been accounted for by small firms and how their S&T intensity differs across industries and ownership groups. We also analyse how various firm characteristics differ over size categories and S&T status. This study is based on newly processed micro-level data provided by the National Bureau of Statistics with information on a large number of S&T indicators for manufacturing firms in China in 2000 and 2004. Our results suggest that the role of small firms in Chinese S&T is similar to that in many other countries. They account for a comparably small share of total S&T and most small firms are not engaged in any S&T. However, those small firms that do engage in S&T tend to be more S&T intensive and have a higher output in terms of patents than larger Chinese S&T firms. Copyright 2010 Blackwell Publishing Ltd.

Suggested Citation

  • Fredrik Sjöholm & Nannan Lundin, 2010. "The Role of Small Firms in the Technology Development of China," The World Economy, Wiley Blackwell, vol. 33(9), pages 1117-1139, September.
  • Handle: RePEc:bla:worlde:v:33:y:2010:i:9:p:1117-1139

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    References listed on IDEAS

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    6. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October.
    7. Nadim Ahmad & Andrew Wyckoff, 2003. "Carbon Dioxide Emissions Embodied in International Trade of Goods," OECD Science, Technology and Industry Working Papers 2003/15, OECD Publishing.
    8. Gary Clyde Hufbauer & Carol Gabyzon, 1996. "Fundamental Tax Reform and Border Tax Adjustments," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa43, February.
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    Cited by:

    1. Fredrik Sjöholm & Nannan Lundin, 2013. "Foreign Firms and Indigenous Technology Development in the People's Republic of China," Asian Development Review, MIT Press, vol. 30(2), pages 49-75, September.
    2. Vinod Mishra & Russell Smyth, 2014. "Technological Change and Wages in China: Evidence from Matched Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 123-138, February.
    3. Rai, Varun & Funkhouser, Erik, 2015. "Emerging insights on the dynamic drivers of international low-carbon technology transfer," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 350-364.
    4. repec:gam:jsusta:v:9:y:2017:i:8:p:1328-:d:106507 is not listed on IDEAS

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