Innovation or Imitation: Empirical Test Based on EPS Global Statistics

Abstract

Technological progress is an important embodiment of innovation-driven, but also the main determinant of sustained economic development. Technological advances lie in the introduction of technology, learning, imitation, and independent research and development. The introduction of technology to developing countries can accelerate technological progress, reduce the technology gap, and promote sustained and rapid economic development. If the technology gap between developed and developing countries is, in fact, gradually shrinking, then the continual introduction and imitation of new technology can easily lead to “path dependence” and technical bottlenecks in developed countries. This trend may also be unfavorable for the protection of intellectual property rights. Due to the externality of knowledge and the cost of imitation, there exists an internal Nash equilibrium point between the R & D strategy and the imitation strategy. In this article, we use population dynamics and the replicon dynamics of R & D and imitation, as well as equilibrium conditions, to optimize the investment path of the enterprise. The balance between the number of R & D and the number of imitators depends on the proportion of the output elasticity of the R & D enterprise. Due to the existence of this balance, the rate of technological progress and the rate of capital growth were found to increase in proportion. Our empirical analysis confirmed this result and found that the transnational flows of the factor affect stability. Therefore, innovation-driven technological progress was found to be an important determinant of sustained economic growth.