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Mapping technological innovations through patent analysis: a case study of foreign multinationals and indigenous firms in China

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Abstract

This study attempts to expand the work on patenting activities of China. The characteristics of foreign multinationals and indigenous entities’ patenting activities in the US patent system are examined in our analysis. This study also attempts to model the diffusion trajectories of patenting activities that result from the functioning of two competing innovation system models adopted by China-FDI and indigenous—to compare the extent of divergence of technological innovations. The findings are useful for highlighting the path of technological innovations and understanding the dynamic potentials through analysis of the growth process. While the results suggest a dominance of foreign firms in patenting activities since the early 2000s, there is a sign of transition from industrial-based to knowledge-driven activities and the formation of evolving propagating behaviour in the production of indigenous technology.

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Notes

  1. Economic reforms have moved China towards a more open and market-oriented economy. A highly centralized and hierarchical model of technological systems was systematically dismantled and gradually replaced with a more flexible and bottom-up system (Naughton and Seagal 2003). Heilmann (2008) studied the political and administrative processes that facilitated the bottom-up initiatives for economic development. The Chinese policy experimentation approach has been proven to be highly innovative (even in the context of rigid authoritarian-bureaucratic environment) in exploring policies or institutions to manage the complex challenges of economic change without systemic breakdown.

  2. The Chinese government has gradually reduced their funding of research institutions’ operational costs, pushing them to acquire resources from industries (Xue 1997).

  3. The goal for this intervention was to promote the indigenous technological capabilities in manufacturing industries.

  4. We follow the definition of Chang (2003, p. 113) where industrial policy is defined as “a policy that intended to affect particular industries to achieve outcomes that are perceived by the state to be efficient for the economy as a whole”. “The policy attempts to change the economic structure over and beyond what the market is able to do by inducing the private sector agents into new activities that they do not have interest in entering under free market situation” (Chang 2003, p. 313). State-owned enterprises or government linked companies in South Korea and Taiwan were established to facilitate their economic development in specific sectors (sectors which required huge capital investment and protection such as transportations, utilities and automobile industries).

  5. In this paper, we use foreign multinationals and MNCs interchangeably.

  6. The improvised strategy is viable due to the size and diversity of the country (see Naughton and Seagal 2003).

  7. Evans (1995)’s notion on “embedded autonomy” is useful to understand state-society interaction. He argued that a government not only needs to have roots in the society (embeddedness) but also will and authority (autonomy) to implement development policies in order to be effective in its intervention. State intervention practice is essential to build technology capabilities and competencies, particularly during the infant stage of industrial development. Amsden (1989, 2001) observed that economies that managed to streamline their national institutions to subsidize learning rents to advance the locally-owned productive organizations would stand a higher chance to catch-up successfully with the world frontiers. Feng and Lu (2010) provided some empirical evidence to make a case that Amsden (1989, 2001)’s core idea of development continues to remain relevant.

  8. R&D is a process of learning including collective learning (learning by others), multidisciplinary learning (techno-economic and managerial/organizational learning) and learning which is cumulative through time (see Teubal 1996).

  9. Mature phase emerges when R&D activities are rooted and routinized in an economy.

  10. Perez (2002) demonstrated five series of Kondratieff waves: the industrial revolution (1771), the age of steam and railways (1829), the age of steel, electricity and heavy engineering (1875), the age of oil, automobile and mass production (1908), and the age of information and telecommunications technology (1971).

  11. A value that is selected through least square line and useful for calculating the coefficients of a and b.

  12. Technological innovation denotes the increases in value of technological knowledge.

  13. A utility patent protects the way an invention is used or works. It can be used as a proxy to indicate inventive and innovative activities that lead to new products or processes in the market. On the other hand, a design patent is a proxy to the visual characteristics or aspects displayed by an object thus does not truly represent technological innovations in our view.

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Wong, CY., Yap, XS. Mapping technological innovations through patent analysis: a case study of foreign multinationals and indigenous firms in China. Scientometrics 91, 773–787 (2012). https://doi.org/10.1007/s11192-011-0595-3

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