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Do state-owned enterprises influence technological development?

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  • Yan, Eric

Abstract

A policymaker may intervene to lower royalties of licensed technology when state-owned firms have higher expenditures on technology. In this paper, we show that firms may more tend to imitate than to innovate when, due to this intervention, the marginal benefit of innovation shrinks in comparison with imitation. We empirically confirm this by comparing China to India, as these two countries promote state-owned firms to different degrees.

Suggested Citation

  • Yan, Eric, 2020. "Do state-owned enterprises influence technological development?," Economics Letters, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:ecolet:v:193:y:2020:i:c:s0165176520302044
    DOI: 10.1016/j.econlet.2020.109306
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    References listed on IDEAS

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    1. Jakob B. Madsen & Md. Rabiul Islam & James B. Ang, 2010. "Catching up to the technology frontier: the dichotomy between innovation and imitation," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1389-1411, November.
    2. Perelman, Sergio & Walheer, Barnabé, 2020. "Economic growth and under-investment: A nonparametric approach," Economics Letters, Elsevier, vol. 186(C).
    3. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    4. Sourafel Girma & Avid Greenaway & Richard Kneller, 2004. "Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 855-866, November.
    5. Joonkyung Ha & Peter Howitt, 2007. "Accounting for Trends in Productivity and R&D: A Schumpeterian Critique of Semi-Endogenous Growth Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(4), pages 733-774, June.
    6. Fabrizio Zilibotti, 2017. "Growing and Slowing Down Like China," Journal of the European Economic Association, European Economic Association, vol. 15(5), pages 943-988.
    7. Ming He & Barnabé Walheer, 2020. "Spillovers and Path Dependences in the Chinese Manufacturing Industry: A Firm-Level Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 56(4), pages 817-839, April.
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    Cited by:

    1. Zhang, Shuang & Wang, Wenzhi & Zhou, Liying, 2024. "Nonstate capital participation and innovation in state-owned enterprises: Scale, structure and quality," Finance Research Letters, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    In-house innovation vs. imitation; State-owned firms;

    JEL classification:

    • F0 - International Economics - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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