Technology transfer and innovation efficiency in a large emerging economy: an integrative perspective of absorptive capacity and the technology ladder

The influence of technology transfer inflows on large emerging economies’ innovativeness has attracted long-standing and substantial attention in the technology transfer literature. However, inconsistencies exist in explaining why technologies transferred from some sources benefit innovativeness over others. Additionally, the unique multilevel technological context in large emerging economies has been largely overlooked. Anchoring upon absorptive capacity theory, we focus on technology transfer from domestic purchase, import and foreign direct investments (FDI), and contend that because of the role of overlap between target technologies and the recipient’s knowledge base in determining technological learning outcomes, technologies transferred from different sources exert uneven influence on domestic innovation efficiency. Then, integrating the “ladder-like” technological structure in large emerging economies based on the technology ladder perspective, we investigate whether domestic technology transfer helps to effectively absorb foreign transfer inflows and increase domestic innovation efficiency. With stochastic frontier analysis on a province-level panel dataset of Chinese high-technology industries over 2009–2016, we find that both domestically purchased and FDI technologies contribute to domestic innovation efficiency, whereas imported ones do not. Additionally, domestic and imported technologies jointly increase domestic innovation efficiency, whereas the interaction between domestic and FDI technologies fails. Overall, building on the absorptive capacity and technology ladder perspectives, our work elucidates the individual and interactive innovation-efficiency effects of three typical sources for technology transfer, thereby contributing to the literature on technology transfer in the context of large emerging economies.