Technological regime and knowledge productivity: An industry-level analysis of Chinese manufacturing

Based on the knowledge production function framework, this article uses industry-level data of Chinese large and medium-size manufacturing enterprises over the period of 1996-2001 to explore the influences of technological regime on efficiency of knowledge production, as well as the potential complementary or crowded-out effects of technology transfer and inter-industry R&D spillover upon in-house R&D in knowledge creation. The empirical results reveal that for efficiency in knowledge production, scale economies, speed of obsolescence of knowledge, and accessibility of external knowledge in foreign technology transfer have positive contributions. But the relative reliance on inter-industry R&D spillover shows negative impact on knowledge productivity. Finally, this article provides an explanation based on the threshold effect of in-house R&D to the issue why the literature concerning complementary or substitution effect between foreign technology transfer and indigenous R&D lead to a mixed result in the context of developing countries.