The power of knowledge: basic research and technological innovation–evidence from within and across industries in China

ABSTRACT

The role of basic research for technological innovation is becoming increasingly prominent along with the shift in demand characteristics of the new development stage of China’s industrial sector. We verified the relationship between basic research and technological innovation using data from China’s industrial sector for the period 2001–2020. Research has found that industry-based research can contribute to higher levels of technological innovation, and that this impact occurs not only within industries but also between industries. The results of the mechanism test indicate that technological opportunities are an important mechanism for the innovation effect of basic research in the industry and that the intra-industry innovation effect of basic research is achieved mainly through increased specialization in the industry. It is further found that the higher the technological level of the industry, the better the technological and policy environment, and the more mature and maturing the industry is, the more significant the innovation effect of basic research in the industry.

KEYWORDS:

• Industry-based research
• technological innovation
• technological opportunities
• industry specialization
• spatial spillover effects

JEL CLASSIFICATION:

• O31
• O38

Acknowledgments

We sincerely thank the journal reviewers for their valuable comments on the manuscript. This work is supported by the the Project of China National Social Science Foundation (grant number 20BJY189).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the authors upon reasonable request.

Additional information

Funding

The work was supported by the National Social Science Foundation [20BJY189].