Social Sciences in China (Chinese Edition)

No.2, 2013

Internal Motives and the Specialization Status of Under-developed Countries: Evidence from China’s High-Tech Industry

(Abstract)

Yang Gaoju and Huang Xianhai

This study incorporates value added ratio and productivity into the analytical framework of intra-product specialization as a globally comparable index for international specialization status, to analyze the effects of domestic technological innovation, labor force investment, capital investment and FDI spillovers on the international specialization status of the industries of developing countries. It also tests empirically the effects against the data from Chinese high-tech industry and enterprises. The results show that domestic technological innovation and the improved coordination of material capital and human capital are key internal motives for the improvement of the international specialization status of Chinese high-tech industry, whereas FDI spillovers play a relatively limited role therein. Therefore, the key to China’s industrial upgrading is to tap and nurture the internal motives rather than to rely on FDI spillovers.