Abstract
We document that a firm's research and development (R&D) expenditure depends on its product diversity. Combining with the fact that Chinese manufacturers often enter new product markets via technology adoption, we develop a quantitative framework of innovation and technology adoption, allowing firms to expand their product scopes. Firms adopt technologies across multiple fields to expand their knowledge base, which in turn serves as an input for subsequent innovation or adoption. Counterfactual analysis from the 2000s reveals that two-thirds of knowledge privately held by all firms is generated through adoption, accounting for one-third of aggregate innovation.
| Original language | English |
|---|---|
| Article number | 105177 |
| Journal | Journal of Economic Dynamics and Control |
| Volume | 179 |
| DOIs | |
| Publication status | Published - Oct 2025 |
Free Keywords
- Innovation capability
- Product expansion
- Technology adoption
ASJC Scopus subject areas
- Economics and Econometrics
- Control and Optimization
- Applied Mathematics