Technology import, secondary innovation, and industrial structure optimization: A potential innovation strategy for China

Hongwei Liao, Liangping Yang, Henan Ma and JiaoJiao Zheng

Pacific Economic Review, 2020, vol. 25, issue 2, 145-160

Abstract: To enhance people’s lives, China needs to maximize the opportunities of technological changes and conduct innovations to optimize its industrial structure in the context of intellectual property rights (IPR) protection. The present paper analyses how industrial structure can be optimized by considering technology imports and innovations, and proposes an innovation strategy for China. We decompose imported technology into embodied technology imports (ETI) and disembodied technology imports (DTI). We found that ETI and DTI have negative effects on industrial structure rationalization and supererogation. Moreover, secondary innovations based on ETI depress industrial rationalization and supererogation, while secondary innovations based on DTI contribute positively. Therefore, DTI should be valued and the absorption of introduced technology improved. It is important to choose the appropriate mode of technology imports, to coordinate on the ratio of technology imports to secondary innovations, and to enhance the absorption of imported technology with the gradual improvement of IPR protection.

Date: 2020
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