Embeddedness and local patterns of innovation: evidence from Chinese prefectural cities

Abstract

The diffusion of innovative activities has been very fast in China since the mid-1990s. The literature nonetheless suggests that internationally-relevant innovation may have delayed gaining embeddedness in some places, depending on the strategy it was “seeded”. This paper posits that different degrees of embeddedness are linked with different local patterns of innovation and investigates these linkages across Chinese prefectural cities. Four research hypotheses are stated, one for each indicator identified in the literature to investigate technological catching up. The empirical exercise is set as an ordered logistic regression of data rearranged from the OECD Patent Databases for the period 1981–2009. The results show that embeddedness is positively linked with innovation that increasingly relies on its own local past and negatively linked with innovative activities more concentrated across patent owners. The evidence of a nexus with originality and technology cycle time is less clear and requires appropriate investigation in future research. At the state of the art, the main hint is that embeddedness is gained where the knowledge paths increase in complexity.