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Related technological density and regional industrial upgrading from perspective of product space theory: evidence from China

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  • Haoyan Cheng
  • Mingyong Song
  • Yunchuan Liu

Abstract

When the product space theory is applied to study regional technology and industry evolution, both the theory exploitation and practical application are not comprehensive and detailed enough. This article traces the connotation of ‘density’ in the product space theory, explains the micro-foundation of regional industrial upgrading from a firm’s perspective, and abstracts industrial upgrading into four processes at two stages. Empirical research shows that an increase in related technological density (i.e. the average proximity of related technologies in a certain region) is beneficial for all processes of industrial upgrading. Marketization has a positive moderating effect on the static stage but a certain ‘counterproductive’ effect on the dynamic stage. Regional heterogeneity analysis shows that, on the whole, the industrial upgrading effect of the related technological density increase is relatively stronger on static processes but relatively weaker on dynamic processes in eastern China, and such results may be attributed to differences in regional resource dependence.

Suggested Citation

  • Haoyan Cheng & Mingyong Song & Yunchuan Liu, 2024. "Related technological density and regional industrial upgrading from perspective of product space theory: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 56(48), pages 5774-5788, October.
    • Handle: RePEc:taf:applec:v:56:y:2024:i:48:p:5774-5788
    DOI: 10.1080/00036846.2024.2385754
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