R&D in China and the implications for industrial restructuring

The nation-wide introduction of foreign technology in China has been going on for over 20 years. This paper examines the R&D incentive of the Chinese innovators by analyzing the patent data for the period from 1985 to 1999. The following findings were obtained. First, individual innovators, as opposed to industrial enterprises and research institutes, have been supplying over 70% of all patent applications filed domestically. Second, innovators in China, including the industrial enterprises, have been devoting their R&D resources disproportionately to small innovations, rather than major ones. Third, the large and medium-sized enterprises are not yet the main force for innovation in China. The impacts of industrial structure on R&D incentive are emphasized. Regression analysis for 37 manufacturing industries in China shows that R&D output, measured by the number of patents per firm, is positively related to the eight-firm concentration ratio. I also analyze the microeconomic channels through which the vertical structure of an industry affects firm incentive to absorb imported technologies. “Excessive competition” and a low degree of vertical integration in Chinese industries are major factors leading to small-scale innovation, high propensity to purchase foreign technologies, and low propensity to absorb them. Establishing enterprise groups that are truly subject to market discipline can speed up the “imitation-first-and-then-innovate” process

A consistency study of coarse-grained dynamical chains through a Nonlinear wave equation of mixed type

A dynamical atomistic chain to simulate mechanical properties of a one-dimensional material with zero temperature may be modelled by the molecular dynamics (MD) model. Because the number of particles (atoms) is huge for a MD model, in practice one often takes a much smaller number of particles to formulate a coarse-grained approximation. We shall mainly consider the consistency of the coarse-grained model with respect to the grain (mesh) size to provide a justification to the goodness of such an approximation. In order to reduce the characteristic oscillations with very different frequencies in such a model, we either add a viscous term to the coarse-grained MD model or apply a space average to the coarse-grained MD solutions for the consistency study. The coarse-grained solution is also compared with the solution of the (macroscopic) continuum model (a nonlinear wave equation of mixed type) to show how well the coarse-grained model can approximate the macroscopic behavior of the material. We also briefly study the instability of the dynamical atomistic chain and the solution of the Riemann problem of the continuum model which may be related to the defect of the atomistic chain under a large deformation in certain locations.Comment: 25 pages, 15 figure

Multinational firms, exclusivity, and the degree of backward linkages

This paper develops a two-tier oligopoly model in which the entry of a multinational firm results in technology transfer to its local suppliers and also impacts the degree of backward linkages in the local industry. The model endogenizes the multinational's choice between anonymous market interaction with its suppliers and contractual relationships with them under which the multinational transfer technology to its suppliers who in turn agree to serve the multinational exclusively. The multinational's entry under an exclusive contract has a de-linking effect that can reduce the degree of competition among suppliers thereby leading to a decline in the level of backward linkages and local welfare. With its emphasis on the supply-side effects of the multinational's entry on local industry, this paper complements existing studies of backward linkages that focus more on demand-side effects. --Multinational Firms,Backward Linkages,Vertical Technology Transfer,Exclusivity