Investigating determinants of inter-regional technology transfer in China: a network analysis with provincial patent data

Abstract

This study examines the determinants of trans-regional technology transfer within China with patent license data. The weighted exponential random graph model is employed for network analysis to investigate the potential impact factors. Our findings have two main streams: First, most technologies are transferred from provinces with greater R&D input, e.g., Beijing and Shanghai, to economically developed provinces, e.g., Guangdong, Jiangsu and Zhejiang. The economic gap between provinces, which is viewed by most researchers to be one of the keys for technology transfer, has insignificant effects. This finding may be because eastern and western provinces are making competing investments and east provinces are investing much less in the west, which is different from what we usually see between developed and developing countries. Because there are competing relationships between provinces, it is common to see repeated investment and similar industry structures between provinces in China, which impose barriers on technology transfer. Second, provinces with more technologies imported from overseas countries acquire more patents from other provinces within China, which indicates a complementary relationship between overseas and domestic technologies. This finding may be partly because provinces acquiring more overseas technology may be in greater demand of additional complementary technology and partly because of the reverse engineering of overseas technology, which may be conducted by provinces with greater R&D input. Our findings should resonate for policy makers seeking to encourage trans-regional technology interaction and boost innovation capabilities.