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Catching Up in the Face of Technological Discontinuity: Exploring the Role of Demand Structure and Technological Regimes in the Transition from 2G to 3G in China

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Abstract

During technological discontinuity based on the transition from second-generation (2G) to third-generation (3G) mobile telecommunications, Chinese manufacturing firms were catching up with leaders in the global industry. Using computer simulation, the paper examines the extent to which heterogeneous demand structures and competitive regimes affect technological catching up. The paper shows that - during technological discontinuity - a slightly higher technological opportunity in combination with low appropriability and heterogeneous demand are vital for technological catching up. The complementary effects of demand within different regimes of Schumpeterian Mark I and Mark II models are discussed.

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Notes

  1. We thank the reviewer for his insightful comments on the suggestion of market share comparison and using of the Monte Carlo method.

  2. Interested readers can find the working version of this paper by using installed base instead of market share to illustrate this market dynamics.

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Acknowledgements

The author gratefully acknowledges the comments and suggestions received from Keun Lee, Mostafa Safdary, Alexander Gerybadze. The comments of three anonymous referees and from the editor of this journal are also greatly appreciated. Financial support from the National Social Science Fund of China (19BJY176), National Natural Science Foundation of China (71272163), the Royal Netherlands Academy of Arts and Sciences (530-5CDC01), and China Scholarship Council (201808695019) are gratefully acknowledged. The usual disclaimers apply.

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Authors and Affiliations

  1. School of Business Administration, Northeastern University, Shenyang, 110819, China

    Peili Yu

  2. School of Finance & Economics, Jiangsu University, Xuefu Road 301, Zhenjiang, 212012, Jiangsu, China

    Junguo Shi

  3. School of Industrial Engineering and Innovation Sciences, Eindhoven University of Technology, Eindhoven, 5600, MB, the Netherlands

    Bert M. Sadowski & Önder Nomaler

  4. UNU-MERIT, Maastricht, 6211, AX, the Netherlands

    Önder Nomaler

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  1. Peili Yu
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  4. Önder Nomaler
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Correspondence to Junguo Shi.

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Yu, P., Shi, J., Sadowski, B.M. et al. Catching Up in the Face of Technological Discontinuity: Exploring the Role of Demand Structure and Technological Regimes in the Transition from 2G to 3G in China. J Evol Econ 30, 815–841 (2020). https://doi.org/10.1007/s00191-020-00673-9

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