Optimal Market Structure Of Industrial Technology Diffusion Theory And Empirical Testing

Technology innovation is basic driving force for the industry development, productivity and living standards of human-beings, as well as the fundamental means to remedy the technological and economic gap and promote the technological progress, and furthermore a decisive factor in national prosperity. The ultimate root of technology innovation is technology diffusion. Diffusion is a process of gradual amplification as the outcome of technology innovation, which not only concerns the realization of the value of technology innovation, but also has a great significance for promoting rationalization and upgrading industrial structures, improving the economic benefits of scientific and technological investment, penetrating technology innovation effectively into the industry, sectors or other areas, and then modifying the imbalance between regions and industries, and accelerating technology progress, promoting economic development and social development.The topic of this paper is in this context of theoretical background and practical initiative. Firstly, we establish a new analytical framework, Market structure-Diffusion-spillover effect, SDE analysis framework. We find that market structure effects diffusing side by affect the formation of sources and the number of sources, while the formation and number of diffusion sources would affect the rate of diffusion; market structure affects the rate of diffusion by affecting the absorption willing and the capacity of the absorption side. Once the absorption side decides to adopt the new technology, it will take different diffusion strategies according to monopolistic competition. Within the same diffusion time era, given the same level of technology absorption and conversion rate, the greater the diffusion rate, then the stronger spillover effects are, that is, absorption side would more relevant information of new technologies. Then, we use the mathematical tools to establish a general model of market structure and technology diffusion under a monopolistic competition market structure and technology diffusion, which has a qualitative analysis on them, and additionally has an empirical study by using our industry data.We should realize that stressing technology diffusion does not emphasized simple imitation and counterfeiting, but establish the most appropriate market structure for technology diffusion by optimizing market environment. However, the environment of Chinese enterprises still have problems like fair competition market environment has not established, enterprises lack resources and competitive advantages, there is a huge contrast between property rights reform and market competition and the defect of market system, most enterprises still mainly imitate, and lack abilities of application and conversion to the technologies. Based on these, we give the paths to promote the overall level of our industry by the means of technology diffusion, which are to further cultivate the market system, further increase the financial input into innovation, form the most appropriate market structure that is in favor of technology diffusion, and build a entrepreneur market which is in favour in technology diffusion.