Learning mechanisms and technological innovation performance: a study of China’s mobile phone manufacturing firms

Abstract

ABSTRACT This article analyses the relationship between learning mechanisms and technological innovation performance in less developed countries’ (LDCs) firms participating in global value chains (GVCs). For this purpose, patent production functions of China’s mobile phone manufactures were estimated using an original dataset. In estimating the functions, we analysed how firms’ learning mechanisms through global suppliers, customers in China and other LDCs, and research institutes correlate with the number of patent applications. The main findings are: along with firms’ in-house R&D efforts, learnings from LDC customers and research institutions positively correlate with the amount of innovation, even in firms with less absorptive capacity. There is no positive correlation between learning from global suppliers and patent applications, although positive correlation may emerge as local firms accumulate sufficient absorptive capacity. The results highlight the importance of learning via broadly defined local innovation systems in enhancing technological innovation in LDC firms participating in GVCs.