Linked versus Non-linked Firms in Innovation: The Effects of Economies of Network in Agglomeration in East Asia

This paper proposes a new mechanism linking innovation and network in developing economies to detect explicit production and information linkages and investigates the testable implications of these linkages using survey data gathered from manufacturing firms in East Asia. We found that firms with more information linkages tend to innovate more, have a higher probability of introducing new goods, introducing new goods to new markets using new technologies, and finding new partners located in remote areas. We also found that firms that dispatched engineers to customers achieved more innovations than firms that did not. These findings support the hypothesis that production linkages and face‐to‐face communication encourage product and process innovation.

Chapter 3 Knowledge Exchanges and Innovation in Connected Firms: Evidence from Upstream-Downstream Relationships

This paper proposes evidences for linking innovation and knowledge exchanges in developing economies towards a comprehensive theory of new economic geography in the knowledge based spatial economy. Firms which dispatched engineers to customers achieved more innovations than firms which did not. Mutual sharing of knowledge also stimulates innovations. A just-in-time relationship is effective for dealing with upgrading production process. But such strong complementarities with partners are not effective for product innovation.. These evidences support the hypothesis that face-to-face communication and complementarities among production linkages have different roles in knowledge creation.

Technology network for machine tools in Vietnam

When Vietnam joined the WTO, it accepted foreign direct investment and started to grow. Technically, it was then greatly influenced by the enterprises that entered the country through direct investment. This report shows that the technology network for machine tools is formed via direct investment and subcontracting.

Does trade liberalization boost quality upgrading? : evidence from Indonesian plant-product-level data

In this study, we examine the effects of tariff reduction on firms' quality upgrading by employing an Indonesian plant-product-level panel dataset matched with a plant-level dataset. We explore the effects of lower output and input tariffs separately, by focusing on the apparel industry. By estimating the Berry-type demand function, we derive product-quality indicators based on the Khandelwal (Review of Economic Studies, 2010) methodology, which enables us to isolate quality upgrading from changes in prices. Our findings are as follows. First, a reduction in output tariffs does not affect product quality upgrading. Second, a reduction in input tariffs boosts quality upgrading in general. In particular, this impact is greater for import firms, which is consistent with the fact that the source of the boost is the import of high-quality foreign inputs.

Winner-Take-All Contention of Innovation under Globalization: A Simulation Analysis and East Asia's Empirics

This paper sets out to examine how innovation enhances export competitiveness: The proposition that export volume becomes enhanced as more productivity-enhancing innovation is captured by the exporting economy is the focus of this study. From a Schumpeterian perspective, innovation can be characterized by continuous creation and subsequent diffusion of newer technologies on the basis of the exporters' existing capital stock. Then we highlight the theoretical possibility that concentration of innovative activities in a small group of "winner" economies would lead to larger shares of "winner" economies' exports of innovation-active commodities than those commodities for which technology involved is already mature. The world's export data corroborates this theoretical prediction overall, and a focus upon East Asia has revealed the region's increasing resort to technology-intensive commodity sectors, which has presumably been enabled through attracting technology-bearing inward foreign direct investment. Considering the overall gains from innovation, acceleration of full "cycle" of innovation and imitation might be a desirable option.

Industrial Development and the Innovation System of the Ethanol Sector in Brazil

The purpose of this paper is to analyze innovations and the innovation system and its dynamics in the ethanol sector in the State of Sao Paulo. More specifically, this paper focuses on the development process in the sector, the public policies taken to promote the sector, and the organizations and key players involved in these policies and their responses to unforeseeable changes in economic, social and technological environments. To this end, this paper takes an historical perspective and reviews data on the cultivation of sugar cane, the production of ethanol, and on sugar cane yields as indicators of the innovations achieved in the sector. The geographical distribution of these indicators is also examined. Next, several cases in Piracicaba and Campinas in the State of Sao Paulo are presented; these give us a more concrete idea of the processes involved in innovation and technology transfer. Based on these observations, the ethanol cluster and the innovation system of the State of Sao Paulo are discussed from the viewpoint of the flowchart approach to industrial cluster policy.

Innovation networks in China, Japan, and Korea : evidence from Japanese patent data

The growing importance of innovation in economic growth has encouraged the development of innovation capabilities in East Asia, within which China, Japan, and Korea are most important in terms of technological capabilities. Using Japanese patent data, we examine how knowledge networks have developed among these countries. We find that Japan's technological specialization saw little change, but those of Korea and China changed rapidly since 1970s. By the year 2009, technology specialization has become similar across three countries in the sense that the common field of prominent technology is "electronic circuits and communication technologies". Patent citations suggest that technology flows were largest in the electronic technology, pointing to the deepening of innovation networks in these countries.

Innovation networks in China, Japan, and Korea : further evidence from U.S. patent data

The growing importance of innovation in economic growth has encouraged the development of innovation capabilities in East Asia, within which China, Japan, and Korea are most important in terms of technological capabilities. Using U.S. patent data, we examine how knowledge networks have developed among these countries. We find that Japan's technological specialization saw gradual changes, but those of Korea and China changed rapidly since 1970s. By the year 2009, technology specialization has become similar across three countries in the sense that the common fields of prominent technology are electronics and semiconductors. Patent citations suggest that technology flows were largest in the electronics technology, pointing to the deepening of innovation networks in these countries. Together with our prior work, the Japanese and U.S. data produce similar conclusions about innovation networks.

The innovation process of a privately-owned enterprise and a state-owned enterprise in China

This study compares the innovation process of a privately-owned enterprise and a state-owned enterprise in China using their patent data. Huawei and ZTE were selected for this study because they experienced the same historical environment in the same industry from the same region in China leaving their owner types as their critical difference. This study investigates the difference in the innovation process in R&D between a privately-owned and a state-owned enterprise by analyzing (1) domestic and international patent application pattern, (2) co-application and co-applicants, (3) knowledge accumulation inside Huawei and ZTE, and (4) knowledge spillover to domestic and foreign firms.

Innovation in Eastern Europe : a case study of Czech Republic

In this study we evaluate innovative performance of the economies of Central and Eastern Europe (CEE) based on the available statistics of innovation processes. We compare such country-level indicators as educational levels, investments in R&D, FDI, trade and licensing flows, patents and scientific articles, and find that the most developed CEE economies are also the most innovative. At the same time, as supported by the results of the interviews in Czech Republic, one of the top performers in the CEE region, its economy is facing a number of challenges that are similar to other middle-income countries around the world. We suggest addressing these challenges from the prospective of the Middle Income Trap, when a middle-income economy to sustain growth must learn to compete with advanced economies in high-skill innovation. Development of effective innovation policy should be a priority for the CEE countries to escape from the middle income trap.