Innovation Strategy And Catch Up With Performance: China's Manufacturing Industry Level Analysis

Nowadays, the rate of technology development has become faster and the ability technological innovation has been the competitive advantage of countries and industries. How could developing countries make use of technological opportunities to catch up with those developed countries has been an often-discussed issue by many scholars. Although developing countries fall behind due to some historical reasons, successful experience of Korea and Taiwan has proven that developing countries could catch up with those countries which are at the frontier of technology in a short period of time. Our research is based on the hypothesis of catching-up in the context of China. Although it is no doubt that China has gained great economic development since the Open Door Police was implemented, we focus on the technological capability of Chinese industries and whether or not these industries have much development in terms of technology capability as the economic profit. We especially focus on the mutual effects between innovation strategy and technological regimes to get a better technological catching-up performance. Our concept is that there is no perfect innovation strategy, and under different innovation environment, industries should take different innovation strategy to get a better technological catching-up performance.This paper has focused on three dimensions to research industry-level innovation strategy and technological catching-up: (1) how to classify innovation strategy in the level of Chinese industry? We use four dimensions of inclination: product innovation, process innovation, in-house R&D development and external knowledge reliance and use cluster method to classify Chinese manufacturing industries into four kinds: Indigenous innovation strategy, Integration strategy, Imitation strategy and Improvement strategy; (2) which kind of factors affect the choice of innovation strategies in Chinese industries in terms of industry characteristics and technological regimes; (3) how do different innovation strategies effect the technological catching-up performance .We find that different innovation strategies has been effected by technological regimes to different degree.Our findings are impressive. we find that Indigenous innovation strategies has been effected negatively by technology development speed in both kinds of catching-up performance - product related and knowledge related; in terms of knowledge-related catching-up performance, Indigenous . innovation strategy, Integration strategy, and Improvement strategy are negatively affected by technological development speed while Indigenous innovation strategy, Imitation strategy, and Improvement strategy are positively affected by technology gap. Last, we find that FDI does have significant spillover effects over native industries in the terms of knowledge-related catching-up performance.We have improved the method to classify innovation strategy because most of previous research has analyzed innovation strategy qualitatively, but we use quantitive analysis method to classify innovation strategy. Concerning to the research of China's catching-up process, technological regime has been rarely used, so we have tried to relate technological regimes to innovation strategy in order to research deeply in catching-up pattern of Chinese industries.