Innovation Strategy and Technological Catch-Up of Chinese Internet Giants: Evidence Based on Patent Data

Abstract

A new generation of information technology (IT), such as artificial intelligence, cloud computing, internet of things, has been transforming production and business across the world profoundly. While Chinese internet companies begin to play an increasingly important role in the global digital economy by pushing forward the technological frontier, existing studies focus on their business models and ignore their rising technological capabilities. Based on natural language processing (NLP) based text mining and network analysis of patent data, this paper examines whether and how IT companies realize technological catch-up through innovation in emerging economies by comparing three leading internet giants in China, namely, Baidu, Alibaba and Tencent with their US counterparts. In particular, it investigates these three technological companies' innovation strategy by analyzing their (1) patent portfolios, technological focus, patenting patterns and trends, and (2) the technological difference between them and their US peers.