Technology Progress Path and CatchupStrategy for Late-Moving LargeCountries

摘要

Based on the endogenous technology progress framework for late-movinglarge countries, this paper simulates the effects of market size on technology progress pathand technology catch-up, and finds that under the strategy of combining innovation withimitation, the increase of market size will restrain the convergence of economies towardstechnology frontier and deepen their reliance on imitation. Under the strategy of replacingimitation with innovation, there is a non-uniform U-shaped threshold effect for marketsize to influence technology progress path and catch-up, and the threshold for the shift oftechnology progress path lags behind that for technology catch-up. Hence, we should followtechnology catch-up as the benchmark and timely adjust our innovation strategy to unleashthe advantages of economies of scale for innovation. The innovation-driven developmentstrategy is a choice compatible with China’s changing market size. However, since Chinaremains in a transition from a super-large economy to a super-strong one, the contributionof innovation will decrease at first before increasing afterwards.