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In the context of tightening resource and environmental constraints globally, it is urgent to promote enterprise's green technological innovation through environmental regulation. This paper uses the panel data of Chinese listed companies from 2009 to 2019 to empirically test the relationship between environmental regulation and green technological innovation, and it also explores the transmission mechanism of executive compensation between these two. The main conclusions are as follows: (1) environmental regulation can promote enterprise green technological innovation. (2) Environmental regulation negatively influences the enterprise green technological innovation by reducing executive compensation. (3) The effect of environmental regulation on the promotion of green technological innovation of enterprise is higher in coastal areas than inland areas of China; while the effect of environmental regulation on the promotion of green technological innovation of enterprise is higher in state-owned enterprises than others. [ABSTRACT FROM AUTHOR]

This paper takes the China high- and new-technology enterprise (HNTE) program implemented in 2008 as a quasi-natural experiment. Difference-in-differences (DID) estimate with matching data from the China Industrial Enterprise Database, the China Customs Database and the HNTE Certification Database for 2006–2010 is used to study the impact of HNTE certification on enterprises' export product quality. The results show that, overall, HNTE certification promotes the upgrading of export product quality. Moreover, the improvement of innovation ability brought by HNTE certification is an important channel to promote such upgrades. A series of robustness tests also confirm the above conclusions. In addition, heterogeneity analyses are conducted based on the enterprise size, ownership and trade mode, respectively. The results show that the mechanism by which HNTE certification policy promotes export product quality through the improvement of enterprise innovation ability is more significant in non-SOEs and general trading enterprises. [ABSTRACT FROM AUTHOR]

The firm survival risk is essential to intellectual property strategy implementing in China, however only a few studies focus on this problem. The paper investigates the effect of intellectual property rights protection system (IPR) on survival risk. Specifically, we use an event history analysis to track 8486 firms entering the market from the year 2000, and employ computing methods of the time-dependent Cox model. One important finding from this study is that the survival risks of R&D firms can be reduced approximately 22.57% by every additional unit of intellectual property, and the marginal effect raises to 28.33% with the exclusion of the administrative factors. Another important finding is that the relationship between IPR protection and survival risk is affected by R&D revenue. Finally, the survival risk for all those firms with substantive innovation rather than strategic innovation can be greatly affected by IPR system. [ABSTRACT FROM AUTHOR]

Under the background of the resource-based view, it is of great significance to assess the mechanism through which knowledge transfer received dimensions (tacit and explicit) affect enterprise innovation performance. Explicitly, the study proposes a moderated moderation model of entrepreneurial opportunity types (innovative and imitative) and environmental dynamism to address this mechanism. In a sample of 314 foreign subsidiaries located in China, we find that: (1) Knowledge transfer received types have a positive influence on enterprise innovation performance, (2) The positive influence is contingent on innovative opportunities, whereas no significant association exists among imitative opportunities, explicit knowledge transfer received, and enterprise innovation performance, (3) The positive effect of innovative opportunities on the knowledge transfer received dimensions-innovation performance links increases when the environmental dynamism is in high tempo. Our paper highlights the importance of incorporating entrepreneurial opportunities and environmental dynamism in probing successful knowledge transfer received dimensions-innovation performance links. [ABSTRACT FROM AUTHOR]

With the deepening of economic globalisation and the rapid development of the Internet, open innovation has become the main innovation paradigm for enterprises to win a competition. There are three modes of open innovation: inbound, outbound, and coupling. Among them, coupling open innovation can better meet the innovation needs of enterprises. This paper takes the survey data of 421 enterprises in 10 cities in East China as samples, and uses a neural network model to explore the relationship between coupling open innovation and innovation performance, as well as the moderating effect of open innovation platforms. The study found that for enterprises in the start-up, growing and transition stages, the proportion of inbound open innovation positively affects innovation performance; for enterprises in the mature stage, the proportion of outbound open innovation positively affects innovation performance. At the same time, there are peak points for both. The breadth of platform openness does not significantly moderate coupling open innovation and innovation performance, while the depth of platform openness has a significant moderating effect on coupling open innovation and innovation performance. [ABSTRACT FROM AUTHOR]

Based on the listed companies in China, this paper studies the influence of government subsidies, R&D expenditures, and enterprise innovation using the Panel Vector Autoregression (PVAR) model on one another and by applying Generalised Method of Moments, Impulses Response Function, and Forecast-Error Variance Decomposition, by dividing enterprise innovation into substantive innovation and strategic innovation. Furthermore, the results show that subsidies and R&D expenditures of enterprises and the impact of scale on the relationship influence each other. Government subsidies and substantive innovation influence each other, while R&D expenditures and strategic innovation influence each other. Furthermore, scale affects the relationship among variables. There is a strong interrelationship between subsidies and R&D expenditures for small-scale enterprises, and a strong interrelationship between subsidies and substantive innovation for large-scale enterprises. [ABSTRACT FROM AUTHOR]

An effective innovation is a significant cause of competitive advantage. The evaluation of regional green technology innovation (GTI) performance in China has gained tremendous interest. In this paper, the GTI activities are split into two components: the green technology R&D (GTR) stage and the technology achievement transformation (TAT) stage. While doing so, we consider the time lag of the GTI process and managerial disposability of the undesirable output. The combination of the network epsilon-based measure (EBM) model and meta-frontier Malmquist-Luenberger (MML) index constitutes a comprehensive analytical framework for evaluating the regional GTI performance in China. This study's empirical results indicate that: (1) China's overall average efficiency of GTI (0.817) is between the efficiency of GTR (0.725) and the efficiency of TAT (0.929); (2) the average efficiencies in the GTR stage fluctuate considerably, with average efficiencies relatively high and constant in the TAT stage; (3) technological progress is the key element which contributes to improvements in the MML index of overall and sub-process GTI; and (4) from a national perspective, the MML index of the overall GTI varies from 0.980 to 1.128 each year, with an average annual growth of 2.8%. [ABSTRACT FROM AUTHOR]

In the era of technological innovation, some companies own similar patent assets but capture different profits. The paper aims to explore whether and why there are different effects of patent assets on firm performance across industries. The listed corporations in the Growth Enterprises Market (GEM) of Shenzhen Stock Exchange, China, are taken as samples, which are categorised as three industries: the technology-intensive industry, capital-intensive industry, and labour-intensive industry, in light of the production factors. Moreover, the multiple stepwise regression and the fixed effects model are utilised. This paper highlights the effects of patent assets on firm performance are different across industries. Patent quality strongly influences firm performance in the technology-intensive industry, while patent count increases firm performance in the capital-intensive industry and labour-intensive industries. Notably, technological knowledge stock owned by companies plays a moderating role in influencing patent assets on firm performance in the technology-intensive industry. Our findings enrich the research on patent assets influencing financial performance from the industrial difference perspective and suggest that companies in different industries should take differentiated patent strategies to improve firm performance. [ABSTRACT FROM AUTHOR]

Chinese listed companies recently come out a set of serious agency problems. For example, directors and controlling shareholders highly override company interests. Conventional governance methods such as introducing non-executive directors couldn't effectively solve this problem. The proposal of encouraging non-controlling major shareholders to actively participate in corporate decision-making becomes more popular nowadays. This paper studies the mechanism of non-controlling major shareholders' exit threat on corporate innovation, and explore the impact of property rights and corporate life cycles on this mechanism. The result shows the exit threat of non-controlling major shareholders did not promote corporate innovation. This is mainly because major shareholders pursue short-term benefits and tend to support financial asset investment rather than R&D investment. Our research also come out that the inhibitory effect of the exit threat of non-controlling major shareholders on corporate innovation is more significant for non-state-owned and mature enterprises in China. This article finds Chinese capital market investors pay more attention to short-term interests and lack the long-term value investment awareness, which is not conducive to the long-term development of enterprises. [ABSTRACT FROM AUTHOR]

The political concept of indigenous innovation in China sets out a guiding principle for the country's major transformation towards becoming an innovation nation. However, firms' innovation strategies and capabilities in middle-income countries are usually heterogeneous, making a uniform response to this concept at the company level highly unlikely. The paper's empirical contribution is based on analysing survey data on technologically advanced machinery firms in China. It uses a multinomial model approach to establish which drivers of innovation go hand-in-hand with the different innovation strategies. This paper identifies different innovation strategies and forms of innovation that co-emerge as part of this transformation, leading to four firm groups: low-cost producers, technology-oriented producers, user-oriented innovators and technology-oriented innovators. It thus contributes to a more differentiated view of the effects of China's innovation-focused transformation. We find that R&D investments, governmental R&D support and scientific collaborations are key factors to distinguish between the above-mentioned groups. [ABSTRACT FROM AUTHOR]

This present paper studies the relationship between the industrial development environment (IDE) and the innovation efficiency (IE) of China’s high-tech industry. First, drawing upon insights from research on regional innovation systems and sectoral innovation systems, the paper proposes a definition of the IDE within which China’s high-tech industry exists. Then, by a factorial analysis, three main components reflecting the IDE are obtained: regional development conditions, regional consumption potential, and interactions between innovation actors. Furthermore, the impacts of various facets of the IDE on three kinds of IE are investigated through the DEA-Tobit regression approach. Based on the results, our analysis can provide information for policymakers to create a favourable environment for China’s high-tech industry. [ABSTRACT FROM AUTHOR]

Based on the cooperation patent data between 31 provinces in China from 1985 to 2017, this paper portrays the topological structure, spatial pattern and proximity mechanism of China's inter-regional innovation cooperation network by the graph theory, spatial statistical methods and the quadratic assignment procedure model. The conclusions are as follows: (1) the topological structure of China's inter-regional innovation cooperation forms a hierarchical network with Beijing as the core and it exhibits a typical small-world property and 'core–periphery' structure. (2) In terms of spatial distribution characteristics, the 'quadruple' with the Beijing–Tianjin region, Yangtze River Delta, Pearl River Delta and Sichuan as the peaks has become the backbone of the inter-regional innovation cooperation network in China. At the same time, the spatial differentiation of the three indicators of degree centrality, median centrality and intensity centrality is obvious. (3) In terms of proximity mechanism, geographical, institutional and cognitive proximity exert a significant effect on China's inter-regional innovation cooperation network linkage. However, there are significant differences in the effects of various proximity elements on China's regional innovation network. [ABSTRACT FROM AUTHOR]

Given the regionally differentiated environmental regulatory means, this paper evaluates the contribution of firms' R&D investment to economic growth with interprovincial panel data on 30 provinces in China from 2009 to 2016, which is based on the time-varying threshold model. Additionally, the coupling coordination degree model (CCDM) is used to measure the effects of technological innovation through enterprise collaboration for R&D input and investment-focused environment regulations. We then explore the inter-regional technology transfer path with different cooperation effects in areas and find: (i) The economic performance of the R&D investments of regional enterprises shows a downward trend with the strengthening of cost-focused ER while an inverted 'U'-shaped relationship that first strengthens and then weakens is presented with the strengthening of investment-focused ER. (ii) The degree of coupling calculated by CCDM is generally low, and synergies are improving from the west to the east, from a geographic perspective. [ABSTRACT FROM AUTHOR]

Based on the theory of sustainable marketing and time cognition, this study constructed a theoretical model among product innovation, sustainable marketing, time perspectives, and customer innovativeness. Using a sample of 290 consumers in China respond to a new energy vehicle, this paper examines the influence of firm's product innovation on customer innovativeness through the paths of sustainable marketing and time perspectives. The results showed that product innovation positively affected three dimensions of sustainable marketing, which then had different effects on present and future time perspectives. Time perspectives positively affected consumer innovativeness. According to the findings, this study discussed implications for theory, practice, and future work. [ABSTRACT FROM AUTHOR]

During the '13th Five-Year Plan period' (2016-2020), one of the main targets for China's energy strategy is to develop a new generation of power system, integrating high shares of renewable energy sources. This implies that the technology industrialisation of microgrid powered by distributed generation of renewable energy is becoming crucial. This paper carries out a comprehensive study of the status and challenges of developing microgrid, based on case studies of demonstration projects of microgrid in China during different developmental stages. The focus is on the effects of government policies, technical innovations and changes in the business model of electricity market on the promotion of microgrid in China and the reformation of electricity market in China. The ultimate target for the reformation of power system in China is to finish the transformation from a linear business model of centralised power system. [ABSTRACT FROM AUTHOR]

This paper uses an in-depth case study approach to compare and analyze e-business microcredit firms and traditional bank business models in China, employing a business model template redefined as an analytical tool. The results suggest that the EMF business model has typical disruptive innovation characteristics, shedding new light on the definition and criteria of disruptive business model innovation as little research has done on its systematic analysis. This study also presents a holistic conceptual framework for four triggers constituting their business model difference, inclusive of non-mainstream customer positioning, inclusive platform-based infrastructure, platform-based leveraged capability, and user experience-centered value proposition. [ABSTRACT FROM AUTHOR]

This paper takes an innovation system approach to analysing the development of wind energy in three jurisdictions: the EU, USA and China. The paper builds on and extends previous innovation system studies on wind in two ways. First, it focuses on the interactions over time between policy and innovation system dynamics, in order to highlight lessons for low-carbon policymaking. Second, it extends the analysis from the formative and growth phases of the innovation system to the globalisation and transfer phase, in which mature technologies are transferred to new markets. The conclusions are: first, policies should go beyond ‘market pull’ and ‘technology push’ and should take into account the institutional frameworks through which they are delivered; second, policies have been more successful where they prioritised long-term learning-oriented deployment rather than short-term efficiency; third, system failures exist at the transfer stage of development as well as during formative and growth phases. [ABSTRACT FROM AUTHOR]

Knowledge sharing is the key factor that influences the performance of open source software (OSS) projects, which are the representative cases of distributed innovation. This paper aims to explore the mechanism of knowledge sharing in OSS projects from the perspective of developers in China. A quantitative method with the analysis of 403 valid questionnaires is adopted. A series of hypotheses about how distributed innovation (independent variables) influences knowledge sharing (mediating variable) and then affects the performance of OSS projects (dependent variable) are tested and approved. On the one side, we argue that developers will actively affect knowledge sharing in terms of participative motivation, social network and organisational culture. On the other hand, users may also affect the knowledge sharing when considering innovation willingness and capacity. It is interesting to find that social network is the most important factor in Chinese cases. It is strongly recommended to strengthen the collaboration between software companies and OSS communities. [ABSTRACT FROM PUBLISHER]

Technology foresight has attracted increasing attention from government and academia as well as industry since the 1990s. However, the impact of technology foresight on national strategic decision-making varies from country to country. This paper aims to introduce the 'Technology Foresight towards 2020' exercise in China, which has been conducted by a research group in the Chinese Academy of Sciences. The paper consists of five parts: (1) introduction; (2) the framework for technology foresight towards 2020 in China; (3) the methodology including scenario building for identifying technology demands and the method for processing and analysing the data from a Delphi survey; (4) the major results of a Delphi survey in the following four research fields: Information technology, Biotechnology, Energy technology, Material science and technology; and (5) the impact of the research on decision-making concerning science and technology development in China. [ABSTRACT FROM AUTHOR]

Most R&D resources in China were allocated to public research institutes/universities until the economic transition of the mid 1990s. To maximize the return from these resources, it is important to have a healthy collaboration between industry and research institutes/universities on industrial innovation. This paper examines that relationship and discusses some empirical evidence on its efficiency with particular reference to industry in Beijing. Following a survey of 950 industrial enterprises, the influences of the collaboration relationship on industrial innovation were analyzed. The main findings indicate that the technology novelty of industrial innovation is positively related to that relationship, i.e. the more the collaboration, the higher the technology novelty of the innovation. However, the collaboration relationship is less efficient in terms of economic performance indicators such as innovation sales and profit ratios, to measure innovation. Moreover, the collaboration relationship is still far from efficient in stimulating industrial innovation in China. The major barriers to successful collaboration have also been addressed in this paper with the aim of devising policies and suggesting possible improvements to collaboration efficiency. [ABSTRACT FROM AUTHOR]

Prolific inventors not only own higher innovation productivity, but also impact other inventors through innovation networks. This paper contributes to existing literatures by differentiating prolific inventors from non-prolific inventors in the network context, and making an empirical analysis of the effect of prolific inventors. We use the patent filing data from the State Intellectual Property Office of China (SIPO) in investigating the effect of prolific inventors on firm innovation. We use the patents filed by 10 largest Information & Communication Technology firms during 1995–2010 and establish the innovation network with patent co-inventing data. The empirical result shows that prolific inventors positively impact their partners who used to co-invent at least one patent with them. Furthermore, prolific inventors positively impact inventors who do not have a close contact with them. The closer the inventors are to prolific inventors, the more patents they produce. Members are thereby more likely to gather around prolific inventors and formulate intensive clusters. In networks centered by prolific inventors, useful knowledge outweighs redundant knowledge, and high clustering that facilitates knowledge flow is proved to be beneficial; while in networks without prolific inventors, high clustering may not be beneficial as there are less inventors holding advanced knowledge. Policy implications are discussed at the end of this study. [ABSTRACT FROM AUTHOR]

This paper uses panel data between 2000 and 2010 to explore how firm ownership and regional industrial structures contribute to regional innovation performance in Chinese provinces. Specifically, we explore how the extent of specialisation and diversification in regional industrial structures at the province level fosters both Marshall–Arrow–Romer and Jacobs spillovers, as well as how foreign and state ownership influence regional innovation. We find: (i) China's regional innovation systems benefit from Jacobs but not MAR externalities, with the former spurring higher quality innovation in the form of increased invention patenting; (ii) state-owned enterprises and foreign-invested enterprises advance local innovation, with the latter again fostering higher quality innovation; and (iii) a convergence towards a combination of low specialisation and high diversity in provincial industrial structure is taking place between China's more developed inland coastal provinces and less developed inland provinces. Implications and suggestions for policy-making and future research are discussed. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to describe the ways in which open search strategies (i.e. open search breadth and open search depth) align with firms’ radical and incremental innovation. By analysing survey data collected from 162 firms in Chinese high-tech markets, we found that a firm pursuing radical innovation benefits more from open search breadth than open search depth to achieve its performance goals; in contrast, a firm processing incremental innovation benefits more from open search depth than open search breadth to improve its performance. Based on these results, managers should pay attention to the fit between open search strategies and radical/incremental innovation. This study not only contributes to the studies of search strategies by identifying the parallel relationship of open search strategies and two types of innovation, but also enriches the theory of open innovation with an empirical analysis. [ABSTRACT FROM AUTHOR]

Technology opportunities analysis (TOA) can support policy-makers or managers in making strategic technical decisions so as to enhance their technological innovation capability and international competitiveness. This paper presents a multi-level framework to support and systematically identify technological opportunities. Patent data as a key component of technology innovation are used to enable TOA within the framework in the present research. At the research and development (R&D) level, we anticipate the directions of technology development based on technology morphology. Countries’ development emphases can also be investigated in order to help identify their R&D strengths and weaknesses and to seek promising development pathways. At the level of competition, we devise the assignee-technology analysis to obtain insight into competitive participants’ technical emphases and intents. It is also used to explore possible collaboration opportunities among them. At the market level, we apply patent family analysis to understand countries’ target markets and to assess prospects for the commercialisation of their technology. We pursue TOA to explore China's opportunities and challenges in dye-sensitised solar cells. The empirical case analysis supports the effectiveness of the TOA model. We believe it can be adapted well to fit other emerging technologies. [ABSTRACT FROM PUBLISHER]

This paper explores the impact of different cooperation networks upon their cooperative innovation effect (CIE) and innovation performance, and examined the relationship between the CIE and the innovation performance of firms. Some interesting findings appear. First, the findings indicate that there are significant and positive relationships between the seven cooperation networks and the CIE of firms, of which the internal cooperation network has the most significant and positive impact on their CIE. Second, the findings also reveal that there are significant and positive relationships between the six cooperation networks, except firm–government cooperation (FGC) and the innovation performance of firms. Third, contrary to some studies from developed countries, the results reveal that FGC does not demonstrate any significant impact on the innovation performance of firms. These results enrich and supplement the current understanding of the relationships between cooperation networks and innovation performance. [ABSTRACT FROM AUTHOR]

This paper adopts a standard-related lens on technology trajectory to analyse the mobile telecommunication technology choices beyond the third generation (3G) in one of the largest emerging countries. The attempt is made to model and map the technological evolution based on different standard platforms and through competing technologies under the globalised background. The interplay between different stakeholders behind different technological standards in China is examined. Whether and to what extent technological developments have respectively shaped the paths is also explored. We identify the key technological, commercial and institutional dynamics driving such technology evolution, and argue that large emerging countries can pursue their own policy agenda while dealing with the diverse interests of various stakeholders home and abroad. We also indicate that there remain some high uncertainties in terms of future technology trajectories under the emerging contexts. [ABSTRACT FROM AUTHOR]

The leading international standards for information security management, ISO/IEC 27001 and ISO/IEC 27002 originate from the UK, but are applied worldwide. This paper explores whether the processes of selection, implementation and use of these interrelated standards differ between China and Europe by studying cases of Chinese and European companies. Chinese companies face some additional problems with the standards but manage to get them successfully implemented in a short period of time. Main differences relate to governance and management of standard adoption. This study is innovative in the method used for standardisation research (comparative multi-case study), and the topic: implementation and impact of information security management standards. [ABSTRACT FROM AUTHOR]

If China is to make the leap from being a manufacturer of goods, often for others, to being a world-class innovator, then Chinese small and medium sized enterprises (SMEs) have an important role to play in achieving this future goal. Much recent debate has focused on innovation activities of multinational corporations in China, with little attention paid to the role of indigenous SMEs and how they attempt to become more innovation oriented. This paper presents findings from 10 case studies of SME firms based in the Zhejiang Province of China to try and establish to what extent external partnerships have helped them become more innovative and competitive. The most common forms of partnering used by these firms is collaboration with universities, with customers and key suppliers, which has implications for how learning and absorptive capacity affects the firm's innovation strategy. [ABSTRACT FROM AUTHOR]

The low-cost carrier (LCC) business model represents a strategic innovation that has had a significant impact on the dynamics of the commercial aviation industry in North America, Europe and increasingly Asia. This paper considers the adoption of the LCC model in China and discusses the effect of the particularities of the Chinese political, economic and regulatory context on the rate and character of adoption. We conclude by considering what the experience of the three companies that have adopted the LCC model can tell us about the prospects for the wider adoption of this model in China. [ABSTRACT FROM AUTHOR]

The aim of this paper is twofold: first, to explore the effects of industrial cluster on innovation capacity, and second, to study the impact of external resources on firms' innovation capacity especially under Chinese regional economic policy. This is a critical subject that lacks sufficient analysis. Through years of investment and effort, several IT industrial clusters have developed in China with Shanghai, Kunshan, Shenzhen and Dongguan the better-known examples. These IT industrial clusters were chosen for an empirical study on the disparities in China's innovation capacity. All of the innovation capacity determinants at these four IT industrial clusters were different. It was confirmed that the regional dimension of Chinese economic policy affects firms' innovation capacity in the industrial cluster. The results also show whether the regional policy differences will moderate the cluster effect on innovation. [ABSTRACT FROM AUTHOR]

Throughout the world the creation of successful technology districts has become a major issue for public policy makers. This paper analyses the potential role of the state in entrepreneurship and the creation of technology districts, and outlines implications for China's social market economy. We identify three types of technology districts: (1) market-driven technology districts such as Silicon Valley in the USA and Cambridge in the UK; (2) state-driven technology districts targeting foreign multinational companies, such as Sophia Antipolis in France and Singapore; (3) state-driven technology districts which nurture local companies, such as the Hsinchu Science and Industrial Park in Taiwan. We believe that these three typologies provide the foundation for better understanding the potential role of the state in science and technology for China in the early 21st century. [ABSTRACT FROM AUTHOR]

During the 1990s Chinese telecommunication (telecom) manufacturing firms attempted to enhance their innovative knowledge capabilities by concentrating efforts on technological importation and assimilation. In order to improve indigenous technological innovation capability, Chinese firms enhanced their capabilities by accumulating and reactivating firm-specific knowledge. This paper attempts to explore the growth trajectory of some Chinese telecom firms' technological capabilities. Often the catching-up of a firm's technological capability is a trade-off process between the frequent accumulation of technical knowledge and the infrequent leapfrogging of the comprehensive technological capability. To explain the catching-up trajectory of technological evolution the Chinese telecom manufacturing sector was selected. A conceptual framework of the catching-up of technological capabilities is proposed. The framework and the implicit logic of technological catching-up are analyzed through a theoretical lens. A detailed empirical study of a Chinese telecom manufacturer is then presented to validate the capability catching-up pattern. [ABSTRACT FROM AUTHOR]

In this paper, we use industry level panel data regression models to examine the technology spillovers from large- and medium-sized enterprises (LMEs) into non-LMEs, as well as from state-owned LMEs into state-owned enterprises and non-state-owned enterprises, in Chinese manufacturing industries. Our study reveals that technological developments in LMEs have a technology spillover effect upon non-LMEs, and state-owned LMEs have a strong technology spillover effect upon both state-owned and non-state-owned enterprises in manufacturing industries with below average technological capital intensity. As the agents of knowledge diffusion and providers of technological public goods, state-owned LMEs have played a critical role in bridging the technology gap between advanced technologies brought in by foreign funded enterprises and the technological base of other local firms, and thus have facilitated the assimilation and adaptation of advanced foreign technologies in the development of the Chinese manufacturing industry. [ABSTRACT FROM AUTHOR]