Ownership, R&D and Productivity Change: Assessing the Catch-up in China’s High-tech Industries

This study contributes to the debate on whether China’s domestic enterprises (DEs) have experienced a significant catch-up compared with foreign-funded enterprises (FFEs) in high-tech industries. Our paper tries to estimate a new set of capital stock and R&D capital stock by ownership for China’s high-tech industries. Then, using this newly constructed data set, it assesses the comparative productivity performance of state-owned enterprises (SOEs) (as the most important proxy for DEs) in high-tech industries from 1996 to 2006. The results show that SOEs as a whole have experienced an inverted U-shape trajectory of catch-up for 1996-2006, while those SOEs which originate from competitive industries tend to show a better performance. With respect to the technology catch-up, SOEs in particular are still lagging behind because of their failure to develop indigenous technology capabilities. JEL classification: E22; L63; O47; P27