Is national border weakening in technology space? Analysis of inter-urban hierarchy with Chinese patent licensing data

The literature on the diffusion of innovation from the 1970s has found that a domestic inter-urban hierarchy was the most common conduit for the innovation diffusion. Has this hierarchy become obsolete in today’s globalized economy? As less-developed cities within a developing country absorb technological innovation directly from overseas, is the nationality of cities becoming less important? Contemporary economic geography literature tends to answer these questions in the affirmative. This study challenges that resounding yes. Through our analysis of Chinese patent licensing data, we find evidence not only for the survival but also for the reinforcement of the domestic inter-urban hierarchy. While it is true that the number of cities licensing patents to import technology from overseas has been increasing, it is being outmatched by the domestic patent licensing from the top-tier cities within China. This development demonstrates that the role of the nation as a spatial unit of knowledge production and application has remained constant throughout, even as the technological level of its cities has improved under the increasing globalization of the national economy.