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The Role of Small Firms in China's Technology Development

  • Lundin, Nannan

    ()

    (Örebro University)

  • Sjöholm, Fredrik

    ()

    (Research Institute of Industrial Economics)

  • Ping, He

    (National Bureau of Statistics of China)

  • Qian, Jinchang

    (National Bureau of Statistics of China)

Science & Technology (S&T) is high on the Chinese policy agenda but there are large uncertainties on the actual S&T development. For instance, previous studies tend to focus only on large and medium-sized enterprises (LMEs). The situation in Chinese small firms is far less explored. This paper aims to examine the role of S&T-based small firms. More precisely, we examine how much S&T that has been accounted for by small firms and how their S&T intensity differs across industries and ownership groups. We also analyze 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 small-, medium-, and large-sized manufacturing firms in China in 2000 and 2004. Our results suggest that small firms in Chinese S&T resemble their role 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.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 695.

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Length: 34 pages
Date of creation: 06 Feb 2007
Date of revision:
Handle: RePEc:hhs:iuiwop:0695
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  1. Can Huang & Celeste Amorim & Joaquim Borges Gouveia & Mark Spinoglio & Augusto Medina, 2004. "Organization, Program and Structure: An Analysis of the Chinese Innovation Policy Framework," Working Papers de Economia (Economics Working Papers) 17, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
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  3. Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-43, May.
  4. Pakes, A. & Ericson, R., 1990. "Empirical Implications Of Alternative Models Of Firm Dynamics," Papers 594, Yale - Economic Growth Center.
  5. Ericson, Richard & Pakes, Ariel, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 53-82, January.
  6. Lambson, V.E., 1989. "Industry Evolution With Sunk Costs And Uncertian Market Conditions," Working papers 8904, Wisconsin Madison - Social Systems.
  7. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  8. Russell Cooper & John Haltiwanger & Laura Power, 1995. "Machine Replacement and the Business Cycle: Lumps and Bumps," NBER Working Papers 5260, National Bureau of Economic Research, Inc.
  9. Audretsch, David B., 1995. "Innovation, growth and survival," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 441-457, December.
  10. Hicks, Diana & Hegde, Deepak, 2005. "Highly innovative small firms in the markets for technology," Research Policy, Elsevier, vol. 34(5), pages 703-716, June.
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