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Economics of Innovation in Asia

Paper Session

Sunday, Jan. 3, 2021 3:45 PM - 5:45 PM (EST)

Hosted By: American Committee on Asian Economic Studies & American Economic Association
  • Chair: Calla Wiemer, American Committee on Asian Economic Studies

Innovating on Giants’ Shoulders: Evidence from Patent Networks in China

Fushu Luan
,
Liverpool University
Yang Chen
,
Liverpool University
Ming He
,
Liverpool University

Abstract

Knowledge and technology advance are linked within and across technology classes. Current invention activities are also shaped by the past trajectory. To investigate on whether innovation is built upon past accumulation, we calculate and map the past invention network structure using citations for a sample of more than five million patents in China during 1985-2015. across 8 patent sections and 128 patent classes based on the International Patent Classification (IPC) Code. The innovation network structure is useful to identify the upstream technology clusters in the central network position that have a wider connection with other patent classes. Accounting for the strength of technology flows both within and across patent class, we are able to construct a citation matrix to model the interaction of the preexisting network structure and estimate future innovation after 2005. Our findings confirm that we innovate atop of giants’ shoulders. Innovation growth in one technology field closely associates with its own past upstream accumulation as well as the inter-class technology spillover.

Fabrication and Knowledge Activities in Asia: Measurement and Analysis

Gaaitzen de Vries
,
University of Groningen
Elisabetta Gentile
,
Asian Development Bank

Abstract

This paper examines the role of scale and productivity effects in driving income per capita convergence in Emerging Asia to OECD levels during the period 2000 to 2018 . We combine labor income data with multi-regional input-output tables to measure the amount and location of global value chain (GVC) income from carrying out fabrication and knowledge activities for final manufactured products. In our framework, product and process innovation is defined by associated improvements in productivity. Functional upgrading is defined as an increasing income share derived from knowledge activities. Asia experienced a rapid expansion in the scale of fabrication activities but a slower expansion in the scale of knowledge activities. We find convergence in productivity toward OECD levels from low initial levels.

Do Diverse Forms of Intellectual Property Rights Matter Differently for Innovation at Different Stages of Development? Firm-Level Evidence from Korea

Keun Lee
,
Seoul National University
Raeyoon Kang
,
Seoul National University
Donghyun Park
,
Asian Development Bank

Abstract

Earlier literature on the economics of intellectual property rights (IPRs) focused on the tradeoff between incentives to innovate and encouragement of diffusion. Recent literature has expanded attention to diverse forms of IPRs in promoting innovation and growth. Recent studies not only consider regular invention patents but also utility models (petite patents) and trademarks. Using firm-level IPR data on patents, designs, and trademarks for Korea, we extend this new strand of literature to consider effects at different stages of development. Spanning five decades, the data can be divided into three sub-periods representing different stages of Korea’s development. We find that design-intensive sectors differ from trademark-intensive sectors in being more export-oriented and less capital-intensive. In such design-intensive, export-oriented sectors, sales growth is significantly associated with high design intensity. The association is found only since the 1990s, not during earlier stages of development when petite patents were more prominent. Taken together with earlier studies, our finding implies that different IPR forms matter more for innovation at different stages of development. In the Korean experience, petite patents matter more at an early stage of development, with a shift to design IPRs in export-oriented sectors and trademarks in domestic market-oriented sectors in a middle stage, and finally to patents at a later stage.

A New Approach to Growth Accounting: The Case of China

Gary H. Jefferson
,
Brandeis University
Fung Kwan
,
University of Macau

Abstract

This paper formulates a novel growth accounting framework that performs two functions. First, it underscores the central role of physical and human capital investment in transmitting technology and driving long-run growth. Second, it identifies two fundamental conditions – balanced factor growth and factor returns – that are consistent with a steady state, thereby fostering economic stability and efficiency. We apply the framework to data from the Chinese National Bureau of Statistics and the China Human Capital Report to account for China’s economic growth during 1992–2016. Key findings include: the NBS and CHLR human capital data contain significant inconsistencies. Once we account for the implications of substantially higher rates of growth of physical capital than human capital, including the impact on factor income shares, we conclude that during 1992-2016, China’s economy converged toward steady state efficiency with a tendency for the rates of growth and returns to physical and human capital to equalize. That these rates of return also appear to have converged to levels similar to those of the U.S. during the latter half of the 20th century is problematic for China’s ability to attract and generate returns to investment needed to sustain robust growth for a rising economy.
Discussant(s)
Calla Wiemer
,
American Committee on Asian Economic Studies
Nadia Doytch
,
City University of New York-Brooklyn College
Michael Plummer
,
Johns Hopkins University
Sumner La Croix
,
University of Hawaii
JEL Classifications
  • O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
  • O5 - Economywide Country Studies