Empirical research on the different innovation engine between China and US manufacturing using an improved method

ABSTRACT

Most studies arrive at controversial conclusions about the relationship between firm size and technological innovation. Industrial differences and subjective model design are generally considered the primary cause. In static comparisons across industries, dynamic industrial changes are ignored, but this might lead to differing results when attempting to identify the driving forces of evolutionary change in an industrial environment. This study applies nonparametric regression methods with an expansive industry grouping to overcome the industry-difference interference and empirical model error, typifying traditional studies. First, a comparative analysis of the forces driving US and Chinese manufacturing is performed. Results indicate that US and Chinese manufacturing are in different industrial growth stages. Chinese manufacturing takes the traditional elements and R&D input as its main driving factors, which require objectively, expansive scale of enterprise, therefore showing characteristic Schumpeterian innovation. US manufacturing is driven by both R&D and non-R&D inputs; so it can maintain continuous innovation through cooperative networks under conditions of constant or contracting firm size.

KEYWORDS:

• Innovation engine
• manufacturing
• China
• US

JEL CLASSIFICATION:

• O32
• O14

Acknowledgements

A research team from DUFE (Jianjun Wang, Jingjing Lin, Wenjia Ma and Qinglei Guo) produced and sent out the questionnaire. Craig C. Julian from SCU, Yunzeng Wang from CUR and Liangmou Gao from DUFE provided collegial review on a number of drafts of this article. Errors and omissions remain the responsibility of the author.

Additional information

Funding

Funding for this project was provided by National Natural Science Foundation of China [71472028] and National Natural Science Foundation of China for youth [71103027].