The Dynamic Interplay Between Antecedents of Technical Innovation: Evidence From China

Abstract

Antecedents of technical innovation trigger firms to perceive changes in demand in emerging markets, thereby facilitating firms to update their primary technologies accordingly. These factors predicting firms’ activities vary across hierarchies, stages, and categories, but they jointly affect firms’ exploration and exploitation activities in technical fields. Previous research reveals how different antecedents lead to heterogeneity in firms’ innovative actions. However, there is still a lack of analyses on the associations between such antecedents. To fill this gap, our empirical research proposed endogenous links among predictors from three perspectives. First, firms’ updating processes in technical domains exhibit a specific type of iterative procedure across multiple market levels, including those at the firm, industry, and national levels. The antecedents of such innovation mutually affect each other within this multi-level iteration. Furthermore, some antecedents that arise at certain stages possibly lead to the appearance of others in later phases, that is, their relationships are reciprocal. Third, the predictive factors of firms’ technical innovation can be categorized into groups based on their features. Cause-effect relationships exist between the identities of these groups. We focused on Chinese technology markets, particularly the technical catch-up phenomenon, and employed a pertinence survey to test our hypotheses. Our findings indicate the associations between technical innovation antecedents and the effects of endogeneity problems on these relationships, thus providing practical implications and directions for future research in relevant areas.