IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v69y2025i2d10.1007_s00181-025-02752-x.html
   My bibliography  Save this article

State-owned enterprises fail to drive regional technological diversification: evidence from China

Author

Listed:
  • Fei Wang

    (Beijing Information Science and Technology University)

  • Hao Wang

    (Beijing Information Science and Technology University)

  • Qiliang Mao

    (Capital University of Economics and Business)

Abstract

This study empirically analyzes the impact of state-owned enterprises (SOEs) on the emergence of new technologies in a panel of Chinese prefectures. We trace the technological diversification path of regions using patent data and find that regions with higher SOEs shares are less capable of developing new technologies. Further tests demonstrate that SOEs narrow the scope of related diversification process. An obvious obstacle in cooperation lies between SOEs and other entities, implying fewer collaborative innovations in regions with higher SOEs shares and subsequently obstructing the emergence of new technologies from existing technological bases. Our work provides evidence that the ownership structure of the regional economy affects the opportunities for regions to diversify into new technologies from local capabilities, adding new insights to understand the economic divergence across regions in some countries after they replaced socialist regimes with market-based institutions.

Suggested Citation

  • Fei Wang & Hao Wang & Qiliang Mao, 2025. "State-owned enterprises fail to drive regional technological diversification: evidence from China," Empirical Economics, Springer, vol. 69(2), pages 915-949, August.
    • Handle: RePEc:spr:empeco:v:69:y:2025:i:2:d:10.1007_s00181-025-02752-x
    DOI: 10.1007/s00181-025-02752-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-025-02752-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-025-02752-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Helen Wei Hu & Lin Cui & Preet S Aulakh, 2019. "State capitalism and performance persistence of business group-affiliated firms: A comparative study of China and India," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(2), pages 193-222, March.
    2. Stephan Heblich & Marlon Seror & Hao Xu & Stephan Yanos Zylberberg, 2019. "Industrial clusters in the long run: Evidence from Million-Rouble plants in China," Bristol Economics Discussion Papers 19/712, School of Economics, University of Bristol, UK.
    3. Phillips, Kerk L. & Kunrong, Shen, 2005. "What effect does the size of the state-owned sector have on regional growth in China?," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1079-1102, January.
    4. Michael Wyrwich, 2012. "Regional Entrepreneurial Heritage in a Socialist and a Postsocialist Economy," Economic Geography, Clark University, vol. 88(4), pages 423-445, October.
    5. Jing Li & Jun Xia & Edward J. Zajac, 2018. "On the duality of political and economic stakeholder influence on firm innovation performance: Theory and evidence from Chinese firms," Strategic Management Journal, Wiley Blackwell, vol. 39(1), pages 193-216, January.
    6. Philippe Aghion & Ufuk Akcigit & Antonin Bergeaud & Richard Blundell & David Hemous, 2019. "Innovation and Top Income Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 1-45.
    7. Doloreux, David & Parto, Saeed, 2005. "Regional innovation systems: Current discourse and unresolved issues," Technology in Society, Elsevier, vol. 27(2), pages 133-153.
    8. Cull, Robert & Li, Wei & Sun, Bo & Xu, Lixin Colin, 2015. "Government connections and financial constraints: Evidence from a large representative sample of Chinese firms," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 271-294.
    9. Ron Boschma, 2017. "Relatedness as driver of regional diversification: a research agenda," Regional Studies, Taylor & Francis Journals, vol. 51(3), pages 351-364, March.
    10. Filippo Belloc, 2014. "Innovation in State-Owned Enterprises: Reconsidering the Conventional Wisdom," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(3), pages 821-848.
    11. Shengjun Zhu & Canfei He & Yi Zhou, 2017. "How to jump further and catch up? Path-breaking in an uneven industry space," Journal of Economic Geography, Oxford University Press, vol. 17(3), pages 521-545.
    12. Mariana Mazzucato, 2016. "From market fixing to market-creating: a new framework for innovation policy," Industry and Innovation, Taylor & Francis Journals, vol. 23(2), pages 140-156, February.
    13. Nicola Cortinovis & Jing Xiao & Ron Boschma & Frank G van Oort, 2017. "Quality of government and social capital as drivers of regional diversification in Europe," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1179-1208.
    14. Jérôme Stuck & Tom Broekel & Javier Revilla Diez, 2016. "Network Structures in Regional Innovation Systems," European Planning Studies, Taylor & Francis Journals, vol. 24(3), pages 423-442, March.
    15. Franz Barjak, 2001. "Regional Disparities in Transition Economies: A Typology for East Germany and Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 13(3), pages 289-311.
    16. Fleming, Lee & Sorenson, Olav, 2001. "Technology as a complex adaptive system: evidence from patent data," Research Policy, Elsevier, vol. 30(7), pages 1019-1039, August.
    17. Hao Liang & Bing Ren & Sunny Li Sun, 2015. "An anatomy of state control in the globalization of state-owned enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(2), pages 223-240, February.
    18. Boschma, Ron & Capone, Gianluca, 2015. "Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework," Research Policy, Elsevier, vol. 44(10), pages 1902-1914.
    19. Fenske, James & Kala, Namrata & Wei, Jinlin, 2023. "Railways and cities in India," Journal of Development Economics, Elsevier, vol. 161(C).
    20. Frank Neffke & Matté Hartog & Ron Boschma & Martin Henning, 2018. "Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification," Economic Geography, Taylor & Francis Journals, vol. 94(1), pages 23-48, January.
    21. Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001. "The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools," NBER Working Papers 8498, National Bureau of Economic Research, Inc.
    22. Chen, Shuo & Ding, Haoyuan & Lin, Shu & Ye, Haichun, 2022. "From past lies to current misconduct: The long shadow of China's Great Leap Forward," Journal of Development Economics, Elsevier, vol. 157(C).
    23. Emanuele Colonnelli & Bo Li & Ernest Liu, 2024. "Investing with the Government: A Field Experiment in China," Journal of Political Economy, University of Chicago Press, vol. 132(1), pages 248-294.
    24. Artur Santoalha, 2019. "Technological Diversification and Smart Specialization: the role of cooperation," Working Papers on Innovation Studies 20190109, Centre for Technology, Innovation and Culture, University of Oslo.
    25. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    26. Choi, Suk Bong & Lee, Soo Hee & Williams, Christopher, 2011. "Ownership and firm innovation in a transition economy: Evidence from China," Research Policy, Elsevier, vol. 40(3), pages 441-452, April.
    27. Pierre-Alexandre Balland & Ron Boschma & Joan Crespo & David L. Rigby, 2019. "Smart specialization policy in the European Union: relatedness, knowledge complexity and regional diversification," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1252-1268, September.
    28. Liang Zheng, 2021. "The impact of state-owned enterprises on the employment growth of manufacturing in Chinese cities: Evidence from economic census microdata," Urban Studies, Urban Studies Journal Limited, vol. 58(8), pages 1655-1673, June.
    29. Mathieu P A Steijn & Pierre-Alexandre Balland & Ron Boschma & David L Rigby, 2023. "Technological diversification of U.S. cities during the great historical crises," Journal of Economic Geography, Oxford University Press, vol. 23(6), pages 1303-1344.
    30. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    31. Jinyong Zhan & Jingci Zhu, 2021. "The effects of state ownership on innovation: evidence from the state-owned enterprises reform in China," Applied Economics, Taylor & Francis Journals, vol. 53(1), pages 145-163, January.
    32. Ron Martin & Peter Sunley, 2006. "Path dependence and regional economic evolution," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 395-437, August.
    33. Ron Boschma, 2017. "Relatedness as driver behind regional diversification: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 1702, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2017.
    34. David L. Rigby, 2015. "Technological Relatedness and Knowledge Space: Entry and Exit of US Cities from Patent Classes," Regional Studies, Taylor & Francis Journals, vol. 49(11), pages 1922-1937, November.
    35. Tom Broekel & Thomas Brenner & Matthias Buerger, 2015. "An Investigation of the Relation between Cooperation Intensity and the Innovative Success of German Regions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 10(1), pages 52-78, March.
    36. Michael Fritsch & Maria Greve & Michael Wyrwich, 2022. "One transition story does not fit them all: initial regional conditions and new business formation after communism," Post-Communist Economies, Taylor & Francis Journals, vol. 34(8), pages 1001-1028, November.
    37. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    38. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    39. Artur Santoalha, 2019. "Technological diversification and Smart Specialisation: the role of cooperation," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1269-1283, September.
    40. Ming Hua Li & Lin Cui & Jiangyong Lu, 2014. "Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(8), pages 980-1004, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pinheiro, Flávio L. & Hartmann, Dominik & Boschma, Ron & Hidalgo, César A., 2022. "The time and frequency of unrelated diversification," Research Policy, Elsevier, vol. 51(8).
    2. Corrocher, Nicoletta & Grabner, Simone Maria & Morrison, Andrea, 2024. "Green technological diversification: The role of international linkages in leaders, followers and catching-up countries," Research Policy, Elsevier, vol. 53(4).
    3. Ron Boschma, 2018. "The geographical dimension of structural change," Papers in Evolutionary Economic Geography (PEEG) 1839, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2018.
    4. Ron Boschma, 2021. "Global Value Chains from an Evolutionary Economic Geography perspective: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 2134, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2021.
    5. Ron Boschma, 2022. "Evolutionary Economic Geography and Policy," Papers in Evolutionary Economic Geography (PEEG) 2220, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2022.
    6. Xiangjie Liu & Chengliang Liu & Junxian Piao, 2024. "Unpacking technology flows based on patent transactions: does trickle-down, proximity, and siphon help regional specialization?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(1), pages 433-458, June.
    7. Jeroen Content & Nicola Cortinovis & Koen Frenken & Jacob Jordaan, 2022. "The roles of KIBS and R&D in the industrial diversification of regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(1), pages 29-64, February.
    8. Julia Bachtrögler-Unger & Pierre-Alexandre Balland & Ron Boschma & Thomas Schwab, 2023. "Technological Capabilities and the Twin Transition in Europe. Opportunities for Regional Collaboration and Economic Cohesion," WIFO Studies, WIFO, number 70743.
    9. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2024. "Functional upgrading and downgrading in global value chains: The role of complementary interregional value chain linkages in EU regions," Papers in Evolutionary Economic Geography (PEEG) 2432, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2024.
    10. Ron Boschma & Ernest Miguelez & Rosina Moreno & Diego B. Ocampo-Corrales, 2021. "Technological breakthroughs in European regions: the role of related and unrelated combinations," Papers in Evolutionary Economic Geography (PEEG) 2118, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2021.
    11. Flávio L. Pinheiro & Aamena Alshamsi & Dominik Hartmann & Ron Boschma & César Hidalgo, 2018. "Shooting Low or High: Do Countries Benefit from Entering Unrelated Activities?," Papers in Evolutionary Economic Geography (PEEG) 1807, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
    12. Ron Boschma, 2021. "Designing Smart Specialization Policy: relatedness, unrelatedness, or what?," Papers in Evolutionary Economic Geography (PEEG) 2128, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2021.
    13. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2023. "Functional upgrading and downgrading in global value chains: Evidence from EU regions using a relatedness/complexity framework," Papers in Evolutionary Economic Geography (PEEG) 2316, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2023.
    14. Pierre-Alexandre Balland & Ron Boschma & Joan Crespo & David L. Rigby, 2017. "Smart Specialization policy in the EU: Relatedness, Knowledge Complexity and Regional Diversification," Papers in Evolutionary Economic Geography (PEEG) 1717, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2017.
    15. Fl'avio L. Pinheiro & Aamena Alshamsi & Dominik Hartmann & Ron Boschma & C'esar A. Hidalgo, 2018. "Shooting High or Low: Do Countries Benefit from Entering Unrelated Activities?," Papers 1801.05352, arXiv.org, revised Mar 2018.
    16. Andrea Morrison, 2023. "Towards an evolutionary economic geography research agenda to study migration and innovation," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(3), pages 529-542.
    17. Matteo Laffi & Ron Boschma, 2022. "Does a local knowledge base in Industry 3.0 foster diversification in Industry 4.0 technologies? Evidence from European regions," Papers in Regional Science, Wiley Blackwell, vol. 101(1), pages 5-35, February.
    18. Moreno, Rosina & Ocampo-Corrales, Diego, 2022. "The ability of European regions to diversify in renewable energies: The role of technological relatedness," Research Policy, Elsevier, vol. 51(5).
    19. Pintar, Nico & Scherngell, Thomas, 2022. "The complex nature of regional knowledge production: Evidence on European regions," Research Policy, Elsevier, vol. 51(8).
    20. Duygu Buyukyazici & Leonardo Mazzoni & Massimo Riccaboni & Francesco Serti, 2024. "Workplace skills as regional capabilities: relatedness, complexity and industrial diversification of regions," Regional Studies, Taylor & Francis Journals, vol. 58(3), pages 469-489, March.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:69:y:2025:i:2:d:10.1007_s00181-025-02752-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.