Technology strategy, technological context and technological catch-up in emerging economies: industry-level findings from Chinese manufacturing

Abstract

Through an industry-level analysis of large- and medium-size Chinese manufacturing enterprises over the period of 1998–2006, we introduced a quantitative method to measure and identify industry-level technology strategy categories. We explored the effects of technology strategy, technological context (technology gap, technology development speed and FDI presence) and their interactions on technological catch-up performance in terms of product-related and knowledge-related performance. Regarding product-related catch-up performance, the empirical results show that when a wide technology gap exists, its influence on performance will be less negative for industries under technology strategies with high reliance on external technology sourcing. Moreover, when technology development speed is high, its potential negative influence on performance will be more significant for industries relying on in-house R&D and those on product innovation. However, the conclusions are quite different for knowledge-related catch-up performance. Finally, the positive contribution of FDI presence is more associated with knowledge-related catch-up performance.

Keywords:

• technology strategy
• technological catch-up
• technology gap
• speed of technology development
• FDI presence
• manufacturing industry

Acknowledgements

The authors would like to express their appreciation to the anonymous referee for the constructive comments. The funding provided by the National Natural Science Foundation of China (NSFC, grant number 70773100 and 71073141) and the Fok Ying Tung Education Foundation (grant number 111085) are gratefully acknowledged.

Notes

According to the new statistical criterion for the categories of the large, medium and small scale enterprises (2003) released by National Bureau of Statistics of China, large and medium-sized enterprises refer to industrial enterprises with employees 300 and above, sales revenue from main business 30 million RMB yuan and above, and total assets 40 million RMB yuan and above.

The data for industrial value-added is unavailable for the year of 1998; thus, in the regression analysis, we use the data for the period of 1999–2006 instead of 1998–2006.

A similar practice was used in Caves (1974), Blomström and Persson (1983) and Kokko (1994).