Is China's manufacturing sector becoming more high-tech? Evidence on shifts in comparative advantage, 1987-2005

Purpose – The paper assesses the extent to which China’s comparative advantage in manufacturing has shifted towards higher-tech sectors between 1987 and 2005 and proposes possible explanations for the shift. Design/methodology/approach – Revealed comparative advantage (RCA) indices for 27 product groups, representing high-, medium and low-tech sectors have been calculated. Examination of international market attractiveness complements the RCA analysis. Findings for selected sectors are evaluated in the context of other evidence. Findings – While China maintains its competitiveness in low-tech labour intensive products, it has gained RCA in selected medium-tech sectors (e.g. office machines and electric machinery) and the high-tech telecommunications and automatic data processing equipment sectors. Evidence from firm and sector specific studies suggests that improved comparative advantage in medium and high-tech sectors is based on capabilities developing through combining international technology transfer and learning. Research limitations/implications – The quantitative analysis does not explain the shifts in comparative advantage, though the paper suggests possible explanations. Further research at firm and sector levels is required to understand the underlying capability development of Chinese enterprises and the relative competitiveness of Chinese and foreign invested enterprises. Practical implications – Western companies should take account of capability development in China in forming their international manufacturing strategies. The rapid shifts in China’s comparative advantage have lessons for other industrialising countries. Originality/value – While RCA is a well-known methodology, its application at the disaggregated product group level combined with market attractiveness assessment is distinctive. The paper provides a broad assessment of changes in Chinese manufacturing as a basis for further research on capability development at firm and sector levels.

The relationship between market share and information in a high-tech industry

The role of information in high-technology markets is critical (Dutta, Narasimhan and Rajiv 1999; Farrell and Saloner 1986; Weiss and Heide 1993). In these markets, the volatility and volume of information present managers and researchers with the considerable challenge of monitoring such information and examining how potential customers may respond to it. This article examines the effects of the type and volume of information on the market share of different technological standards in the Local Area Networks (LAN) industry. We identify three different types of information: technological, availability and adoption. Our empirical application suggests that all three types of information have significant effects on the market share of a technological standard, but their direction and magnitude differ. More specifically, technology-related information is negatively related to market share as it demonstrates that the underlying technology is immature and still evolving. Both availability and adoption-related information have a positive effect on market share, but the former is larger than the latter. We conclude that high-tech firms should emphasize the dissemination of information, especially availability-related, as part of their promotional strategy for a new technology. Otherwise, they may risk missing an opportunity to achieve a higher share and establish their market presence.

The future of offshoring FDI in high-tech sectors

This paper examines what is still a relatively new phenomenon in the literature, the outsourcing/offshoring of high-technology manufacturing and services. This has become a concern for both policy makers and academics for two reasons. Firstly, policy makers have become concerned that the offshoring of high-technology sectors in the West will follow the more labour intensive sectors, and move to lower cost locations. Secondly, international business theory has tended to view low costs, and high levels of indigenous technological development as being the two main drivers of location advantage in the attraction of FDI. We show that this may not be the case for offshored high-technology manufacturing or services.

Information systems, inter-functional collaboration and innovation in Taiwanese high-tech manufacturing firms

This article investigates whether (1) cross-functional integration within a firm and the use of information systems (IS) that support information sharing with external parties can enhance integration across the supply chain and wider networks and (2) whether collaboration with customers, suppliers and other external parties leads to increased supply chain performance in terms of new product development and introduction of new processes. Data from a high-quality survey carried out in Taiwan in 2009 were used, and appropriate econometric models were applied. Results show that the adoption of IS that enhance information sharing is vital not only for the effective communication with suppliers and with wider network members, but their adoption also has a direct effect across a firm's innovative effort. Cross-functional integration appears to matter only for the introduction of an innovative process. Collaboration with customers and suppliers affected a product's design and its overall features and functionality, respectively. © 2013 Copyright Taylor and Francis Group, LLC.

Does patenting help high-tech start-ups?

Abstract: Using data on all high- and medium-tech start-ups in the UK in 2000, this paper assesses the effect associated with a firm's decision to patent on a firm's subsequent growth between 2001 and 2005. We propose a new approach to addressing well known issues challenging identification of any patent effect: firm heterogeneity, simultaneity between firm performance and patenting, and sample selection. Our findings suggest that patentees have higher asset growth than non-patentees of between 8% and 27% per annum. © 2011 Elsevier B.V. All rights reserved.

Who you are and what you do:the role of entrepreneurial human capital in the demand and supply of external finance of high-tech start-ups

The existence of adequate financial capital at start-up as well as during the lifetime of a firm is considered to be vital not only for its survival but also for its effective trading and growth, as it can act as a buffer against unforeseen difficulties (Cooper, Gimeno-Gascon, & Woo, 1994; Chandler & Hanks, 1998; Venkataraman & Van de Ven, 1998; Cassar, 2004). Inadequate or inappropriate capital structure is often the most common reason for a large proportion of small business failures (Chaganti, DeCarolis, & Deeds, 1995).

Do R&D strategies in high-tech sectors differ from those in low-tech sectors? An alternative approach to testing the pooling assumption

Most studies investigating the determinants of R&D investment consider pooled estimates. However, if the parameters are heterogeneous, pooled coefficients may not provide reliable estimates of individual industry effects. Hence pooled parameters may conceal valuable information that may help target government tools more efficiently across heterogeneous industries. There is little evidence to date on the decomposition of the determinants of R&D investment by industry. Moreover, the existing work does not distinguish between those R&D determinants for which pooling may be valid and those for which it is not. In this paper, we test the pooling assumption for a panel of manufacturing industries and find that pooling is valid only for output fluctuations, adjustment costs and interest rates. Implementing the test results into our model, we find government funding is significant only for low-tech R&D. Foreign R&D and skilled labour matter only in high-tech sectors. These results suggest important implications for R&D policy.