Technological Capacity, Product Position, and Firm Competitiveness

Abstract

Using firm-level data from a 2009 survey conducted in Suzhou city, Jiangsu province, this article examines the impact of technological capacity and value-chain position on a firm's product competitiveness. Technological capacity and product competitiveness are self-assessed relative to other firms and products in the same industry. Position on the value chain is measured relative to a firm's position as an original-brand manufacturer or not. Our empirical results show that competitiveness rises with a firm's technological capacity and its position on the global value chain. This finding is consistent with the theoretical prediction. The article also investigates the determinants of technological capacity and value-chain position, including the firm's size, research and development (R&D) spending, location dummies, educational level of technical and managerial personnel, wages of technical and managerial personnel, and enterprise ownership. Bootstrapping, probit, and linear probability regression models are employed. of technical and managerial personnel, and enterprise ownership. Bootstrapping, probit, and linear probability regression models are employed.