Making the Transition from Imitation to Innovation: An Enquiry into China’s Evolving Institutions and Firm Capabilities

Wendy Dobson () and A.E. Safarian
Additional contact information
A.E. Safarian: Rotman School of Management

No 11, Working Papers Series from Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto

Abstract: How is the Chinese economy making the transition from imitation to innovation as the source of sustained long term growth? We address this question using the evolutionary approach to growth in which institutions support technical advance and enterprises develop capabilities to learn and innovate. Growth is seen as a series of disequilibria in which obstacles to innovation such as outdated institutions and weak incentive systems can cause growth to slow. We review existing literatures on institutions and firm behavior in China and compare these findings with those of our survey of Chinese firms in 2006. Industry and firm studies in the literature show how productivity is rising because of firm entry and exit rather than the adoption of new technologies. A striking feature both of the studies in the literature and our survey is the increasing competitive pressures on firms that encourage learning. Our survey of privately owned small and medium enterprises in five high tech industries in Zhejiang province found a market-based innovation system and evidence of much process and some product innovations. These enterprises respond to growing product competition and demanding customers with intensive internal learning, investment in R&D and a variety of international and research linkages.

JEL-codes: O23 H20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-com, nep-cse, nep-ent, nep-ino and nep-tra
Date: 2008-03, Revised 2008-03

Downloads: (external link)
http://www.rotman.utoronto.ca/userfiles/iib/File/IIB11.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ttp:iibwps:11

Access Statistics for this paper

More papers in Working Papers Series from Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto
Contact information at EDIRC.
Series data maintained by Wendy Dobson (). This e-mail address is bad, please contact .