Technology Import and China's Innovation Capability: Does Institutional Quality Matter?

With the rapid growth of China's economy, technology import plays a crucial role in enhancing regional innovation capability. Based on inter-provincial panel data from 2007 to 2016, this paper uses three benchmark linear regression models of Ordinary Least Squares (OLS), Difference-Generalized Method of Moments (DIFF-GMM), and System-Generalized Method of Moments (SYS-GMM) to explore the improvement of China's regional innovation capability by technology import. Then, the regional institutional quality level is measured from the three dimensions of politics, economy, and law, and the two-step difference GMM threshold panel model is used to analyze the effect of technology import on regional innovation capability under different institutional quality conditions. The results show that: (1) In the benchmark linear regression model, technology import has a significant role in promoting regional innovation capability. (2) With the rise of regional corruption, the quality of political institution declines, and the promotion effect of technology import on regional innovation ability is weakened. (3) The improvement of the marketization level and intellectual property protection level strengthen the role of technology introduction in promoting regional innovation capability. On the contrary, in regions with low economic and legal institutional quality, technology import has no significant impact on regional innovation capability.

Diverse Tools of Industrial Policy in Korea

The chapter presents a Schumpeterian and capability-based view of industrial policy, reflecting upon its practices in Korea over the last several decades. Given that it is typical for many developing countries to suffer from capability failure, industrial policy should go beyond correcting market failure and aim at overcoming capability failure. It is not about picking winners but about picking good students and allowing them time to learn and build capabilities until they are able to compete with incumbent firms from developed countries. This chapter discusses specific industrial policy tools practised in Korea at different stages of its development: tariffs to protect infant industry; technology import licensing to promote building of absorptive capacity; entry control guaranteeing rents for fixed and R&D investment; and public‒private joint R&D to break into higher-end products and sectors. While these tools look different in their concrete contents, they all allow some rents for the targeted sectors, which can be used to pay for building production capabilities in the case of tariffs or technology licensing in the 1970s, investment capabilities in entry control in the 1980s, and technological (R&D) capabilities in the case of public‒private joint R&D in the 1990s.

How Does Technology Import and Export Affect the Innovative Performance of Firms? From the Perspective of Emerging Markets Firms

As economic globalization develops greatly in recent years, emerging market firms (EMFs) increasingly grasp the opportunity of cross-border learning to develop and improve their technology capability through learning by exporting (LBE) and learning by technology importing (LBTI). Although LBE and LBTI have been supported by extensive literature, it still is not clear what and how EMFs learn through LBE and LBTI. In this study, we highlight the role of human agency by examining how perceived competitive threat from informal firms determines EMFs relative preference for product innovation and process innovation. Based on a World Bank dataset on Chinese manufacturing firms during 2009–2011, this study finds firms facing high (vs. low) perceived informal competition which may devote relatively more attention to product innovation than to process innovation after entering into export markets, whereas firms facing high perceived informal competition may pay more attention to process innovation in process of learning by technology import. This study is the first to focus on the effect of informal sector firms on cross-border learning.

Repositioning a country for global manufacturing competitiveness: a case of South Africa

Purpose This study aims to develop an artifact to measure the level of manufacturing competitiveness of a country in the global context and provide a suitable interpretation mechanism for the measured values, and to provide prescriptive solution where necessary so that the country can develop an actionable plan of program to move from the current level of global competitiveness to another such that they could provide more economic opportunities for their citizenry. Design/methodology/approach A manufacturing competitive index (MCI) was developed which includes relevant variables to capture a country’s manufacturing activity level in an economy with a balanced perspective. Reliable international sources were used. Ward algorithm was used to identify clear clusters of performance upon which competitive gaps were measured and improvement projects were identified and prioritized to obtain the best value for cluster transitional plan. Findings This study shows that the case country is not doing as well as it wants to believe, even when the relevant technology import measures were included in the expanded metric, but also, the next level of competitiveness is achievable within the national budget if proper prioritization is done. Originality/value The paper presents a cocktail of indexes that is more exhaustive of MCI, including both research capacity and technology import variables. It also uses clustering mechanism to provide a proper context to interpret the MCI scores in the context of peer nations. It presents a gap determination methodology and shows how priority projects could be logically selected to close measured gaps based on anticipated value from budget expenses

Exploring the complementarity between product exports and foreign technology imports for innovation in emerging economic firms

Purpose The purpose of this study is to advance and test the idea that product exports and technology imports are complementary cross-border learning approaches for emerging market firms’ innovation performance. In addition, this paper also seeks to search for contextual variables that affect this complementarity. Design/methodology/approach This study takes systems approach to examine complementarity, combining a “productivity” and an “adoption” approach. In addition, interaction approach is also used as robustness check. Findings The authors show that the positive effect of export activity on firms’ growth rate is higher for firms that also engage in technology import, and vice versa. Furthermore, they show that, Ceteris paribus, firms’ adoption of one cross-border learning mechanism (e.g. entering export markets) positively influences the adoption of the other (e.g. technology import). Moreover, this complementarity is only significant for firms from province with low level of marketization. Research limitations/implications This inconsistency about learning-by-exporting and technology import on innovation can be resolved, at least partially, by the complementarities perspective. This paper also reveals two mechanisms of learning-by-exporting: the indirect effect of export on innovation through increasing the likelihood of adoption decision of importing technology and enhancing the positive effect of technology imports. Practical implications The potential of combining the two strategies should not be ignored by managers. To improve regional competitiveness, local governments should try best to improve the efficiency of customs to help firms realize the synergistic effect of learning-by- exporting and learning-by-technology-importing. Originality/value This study first explores the positive complementarity between the two cross-border learning mechanism in sharping EEEs 2019 innovation performance and identifies the condition to realize the synergistic effect of learning-by-exporting and learning-by-technology-importing.