Essays on innovations in China

Abstract

This dissertation investigates under what circumstances Chinese sectors and firms are able to break their imitative modes and create new-to-the-world innovations. Using mixed methods and comparing Chinese sectors and firms with their worldwide counterparts, this dissertation reveals the sector-level antecedents and micro-organizational processes of Chinese new-to-the-world innovations. It complements the national innovation system framework and its derivatives with the special features of Chinese innovations which were previously underappreciated. It also extends evolutionary theory, the organizational capabilities perspective and the coopetition literature by building an integrative framework explicating and foreseeing Chinese innovations. Chapter 1 reviews the large literature on the build-up of China’s innovative capacity since 1978 and then introduces three additional lenses—varieties of capitalism, evolutionary theory and coevolutionary theory—that are insightful but not used in a significant way to analyse Chinese innovations. Chapter 2 examines which Chinese sectors are more likely to produce new-to-the-world innovations and why by creating a new measure of new-to-the-world innovations based on China’s patents granted by the European Patent Office from 1986 to 2015. Undertaking wide-ranging econometric analyses on 24 Chinese sectors between 2005 and 2007, I find that Chinese sectors’ divergent innovativeness is associated with five factors, namely domestic patent stock intensity, R&D personnel intensity, government S&T funding intensity, business S&T self-funding intensity, and technology renovation intensity. Chapter 3 presents a comparative case study on a truly innovative Chinese firm and its global competitors to unveil how Chinese new-to-the-world innovations came about. It conveys that the firm’s new-to-the-world product innovation arose from three interacting variation-selection-retention processes underpinned by the firm and its sub-unit’s organizational capabilities of managing internal coopetition and stimulating innovations. I thus establish a capabilities-based multilevel evolutionary framework on this observation and predict for the first time that Chinese new-to-the-world innovations are likely to take place in the sectors emerging after 1978 and in firms with the following organizational features: (1) an internal variation-selection-retention process for product development; (2) a technologically capable and determined leadership at the firm or sub-unit level; (3) a routinized extreme emphasis on good user experiences of products; and (4) a set of routines fostering innovation.