Skip to main content

Indigenous digital technology standards for development: The case of China

Abstract

Research since the 1980s has considered the economic and innovation impacts of technology standards policies. This paper extends the research on the impact of standardization policies to consider how the policies themselves, as they govern how the standards are created, determine standards’ impact on emerging economies’ economic performance and innovation capabilities. Using four cases of digital technology standardization in China, this paper finds that combinations of government financial and market support and openness to domestic and foreign contributors determines how and when digital standardization begets positive technological and economic impacts for firms. This paper contributes to our understanding of international technology upgrading in emerging economies, as well as suggesting policies for successful economic upgrading in large emerging economies.

This is a preview of subscription content, access via your institution.

References

  • Albrecht, C. C., Douglas, L. D. & Hansen, J. V. 2003. Market place and technology standards for B2B. E-commerce: Progress and challenges. Standard making: A critical research Frontier for information systems – MISQ special issue workshop.

  • Bar, F., & Borrus, M. 1987. From public access to private connections: Network Policy and National Advantage. BRIE working paper no. 28. 5th International Telecommunications Policy Research Conference.

  • Barrett, C. B., & Yang, Y. 2001. Rational Incompatibility with international product Standards. Journal of International Economics, 54(1): 171.

    Article  Google Scholar 

  • Bekkers, R., Duysters, G., & Verspagen, B. 2002. Intellectual property rights, strategic technology agreements and market structure: the case of GSM. Research Policy, 31(7): 1141–1161.

    Article  Google Scholar 

  • Bekkers, R., Iverson, E., & Blind, K. 2011. Emerging ways to address the reemerging conflict between patenting and technology standardization. Industrial and Corporate Change, 21(4): 901–931.

    Article  Google Scholar 

  • Bogers, M., & Lhuillery, S. 2011. A functional perspective on learning and innovation: Investigating the organisation of absorptive capacity. Industry and Innovation, 18(6): 581–610.

    Article  Google Scholar 

  • Bradshaw, Y., & Wallace, M. 1991. Informing generality and explaining uniqueness: the place of case studies in comparative research. International Journal of Comparative Sociology, 32(1–2): 154–171.

    Article  Google Scholar 

  • Brown, S. L., & Eisenhardt, K. M. 1997. The art of continuous change: linking complexity theory and time-paced evolution in relentlessly shifting organizations. Administrative Science Quarterly, 42(1): 1–34.

    Article  Google Scholar 

  • BusinessWire. 2003. Datang mobile, Philips and Samsung form joint venture to deliver cellular TD-SCDMA chipset & reference design. New York: Business Wire.

    Google Scholar 

  • Cantwell, J. 2017. Innovation and international business. Industry and Innovation, 24(1): 41–60.

    Article  Google Scholar 

  • Casadesus, M., & Gimenez, G. 2000. The benefits of the implementation of the ISO 9000 standard: Empirical research in 288 Spanish companies. TQM Magazine, 12: 432–441.

    Article  Google Scholar 

  • Chen, Q. 2005. China Putian promote commercial TD-SCDMA services. In Z. Wu, et al. (Eds.), Lecture notes in computer science: Embedded software and systems. Berlin: Springer.

    Google Scholar 

  • Chen, C., Yang, J., & Findlay, C. 2008. Measuring the effect of food safety standards on Chinas’ agricultural exports. Review of World Economics, 144(1): 83–106.

    Article  Google Scholar 

  • ChinabWIPS. 2018. Broadband Wireless IP Standard Working Group. Beijing. http://www.chinabwips.org/

  • Clougherty, J., & Grajek, M. 2008. The impact of ISO 9000 diffusion on trade and FDI: A new institutional analysis. Journal of International Business Studies, 39: 613–633.

    Article  Google Scholar 

  • Cohen, W. M., & Levinthal, D. A. 1989. Innovation and learning: Two faces of R&D. Economic Journal, 99: 569–596.

    Article  Google Scholar 

  • Cohen, W. M., & Levinthal, D. A. 1990. Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 35: 128–152.

    Article  Google Scholar 

  • Crane, R. J. 1979. The politics of international standards: France and the color TV war. Norwood, NJ: ABLEX Publishing Corporation.

    Google Scholar 

  • CTN. 2003. VP5 and VP6 to be included in China’s EVD standard. China Tech News. Beijing: BDL Media.

  • CTN. 2008. Datang holdings buys stake in SMIC. China Tech News. Beijing: BDL Media.

  • CTN. 2009. SMIC signs cooperative agreement with Datang. China Tech News. Beijing: BDL Media.

  • David, P. A. 1985. CLIO and the economics of QWERTY. American Economic Review, 75(2): 332–337.

    Google Scholar 

  • David, P. A., & Greenstein, S. 1990. The economics of compatibility standards: An introduction to recent research. Economics of Innovation and New Technology, 1(1/2): 3–41.

    Article  Google Scholar 

  • David, P., & Steinmueller, W. E. 1994. Economics of compatibility standards: An introduction to recent research. Economics of Innovation and New Technology, 1: 3–4.

    Article  Google Scholar 

  • Eisenhardt, K. 1989. Building theories from case research. The Academy of Management Review, 14(4): 532–550.

    Article  Google Scholar 

  • Ernst, D. 2011. Indigenous innovation and globalization: Challenges for China’s standardization system. Honolulu: East West Center.

    Google Scholar 

  • Fan, P. 2006. Catching up through developing innovation capability: Evidence from China’s telecom-equipment industry. Technovation, 26: 359–368.

    Article  Google Scholar 

  • Farrell, J. 1989. Standardization and intellectual property. Jurimetrics Journal, 30(Fall): 35–50.

    Google Scholar 

  • Farrell, J., & Saloner, G. 1986. Installed base and compatibility: Innovation, product preannouncements, and predation. The American Economic Review, 76(5): 940–955.

    Google Scholar 

  • Fontana, Roberto. 2008. Competing technologies and market dominance: Standard ‘Battles’ in the local Area Networking industry. Industrial and Corporate Change, 17(6): 1205–1238.

    Article  Google Scholar 

  • Franco, C., Marzucchi, A., & Montresor, S. 2014. Absorptive capacity, proximity in cooperation and integration mechanisms. Empirical evidence from CIS data. Industry and Innovation, 21(4): 332–357.

    Article  Google Scholar 

  • Frauenheim, E. 2004. Report: China’s next-generation DVD faces hurdles. CNET News, 2008: CNET Networks Inc.

  • Fu, X., Pietrobelli, C., & Soete, L. 2011. The role of foreign technology and indigenous innovation in the emerging economies: technological change and catching-up. World Development, 39(7): 1204–1212.

    Article  Google Scholar 

  • Funk, J. 2002. Global competition between and within standards: The case of mobile phones. New York: Palgrave.

    Book  Google Scholar 

  • Funk, J., & Methe, D. T. 2001. Market- and community-based mechanisms in the creation and diffusion of global industry standards: the case of mobile communication. Research Policy, 30(4): 589–610.

    Article  Google Scholar 

  • Gallagher, S. R. 2012. The battle of the blue laser DVDs: The significance of corporate strategy in standards battles. Technovation, 32: 90–98.

    Article  Google Scholar 

  • Gao, X., & Liu, J. 2012. Catching up through the development of technology standard: The case of TD-SCDMA in China. Telecommunications Policy, 36(7): 531–545.

    Article  Google Scholar 

  • Gligor, D. M., Esmark, C. L., & Golgeci, I. 2016. Building international business theory: A grounded theory approach. Journal of International Business Studies, 47: 93–111.

    Article  Google Scholar 

  • Glimstedt, H. 2001. Competitive dynamics of technological standardization: The case of third generation cellular communications. Industry & Innovation, 8: 49–78.

    Article  Google Scholar 

  • Gruber, H., & Verboven, F. 2001. The evolution of markets under entry and standards regulation – the case of global mobile telecommunications. International Journal of Industrial Organisation, 19(7): 1189–1212.

    Article  Google Scholar 

  • Henson, S., Masakure, O., & Cranfield, J. 2011. Do fresh produce exporter from Sub-Saharan Africa benefit from Global GAP certification? World Development, 39(3): 375–386.

    Article  Google Scholar 

  • Hess, C. M., & Kemerer, C. F. 1994. Computerized loan origination systems: An industry case study of the electronic markets hypothesis. MIS Quarterly, 18(3): 251–275.

    Article  Google Scholar 

  • Hussinger, K., & Schwiebacher, F. 2015. The market value of technology disclosures to standard setting organisations. Industry and Innovation, 22(4): 321–344.

    Article  Google Scholar 

  • Hytonen, H., Jarimo, T., Salo, A., & Yli-Juuti, E. 2012. Markets for standardised technologies: Patent licensing with principle of proportionality. Technovation, 32: 523–535.

    Article  Google Scholar 

  • Kanellos, M. 2004. DVD Player Profits down to $1. cnet News: CBS.

  • Kennedy, S., Suttmeier, R., & Su, J. 2008. Standards, stakeholders, and innovation. Seattle: National Bureau of Asian Research.

    Google Scholar 

  • Kim, C. S., & Inkpen, A. C. 2005. Cross-border R&D alliances, absorptive capacity and technology learning. Journal of International Management, 11(3): 313–329.

    Article  Google Scholar 

  • Kim, D.-H., Lee, H., Kwak, J., & Seo, D. 2014. China’s information security standardization: analysis from the perspective of technical barriers to trade principles. Telecommunications Policy, 38: 592–600.

    Article  Google Scholar 

  • Kinney, S. 2014. RIP: China mobile’s TD-SCDMA 3G network (2009–2014). RCR Wireless News.

  • Kshetri, N., Palvia, P., & Dai, H. 2011. Chinese institutions and standardization: The case of government support to domestic third generation cellular standard. Telecommunications Policy, 35(5): 399–412.

    Article  Google Scholar 

  • Kumar, N. 2003. Intellectual property rights, technology and economic development: Experiences of Asian countries. Economic and Political Weekly, 38(3): 209–226.

    Google Scholar 

  • Kushida, K. 2008. Wireless bound and unbound: The politics shaping cellular markets in Japan and South Korea. Journal of Information Technology and Politics, 5(2): 231–254.

    Article  Google Scholar 

  • Kushida, K. 2011. Leading without followers: How politics and market dynamics trapped innovations in Japan’s ‘Galapagos’ telecommunications sector. Journal of Industry, Competition and Trade, 11: 279–307.

    Article  Google Scholar 

  • Lee, K. 2013. Schumpeterian analysis of economic catch-up: knowledge path-creation, and the middle income trap? Cambridge, UK: Cambridge University Press.

    Book  Google Scholar 

  • Lee, H., & Oh, S. 2008. The political economy of standards setting by newcomers: China’s WAPI and South Korea’s WIPI. Telecommunications Policy, 32: 662–671.

    Article  Google Scholar 

  • Lemon, S. 2008. Troubled SMIC gets lifeline from China’s Datang. MIS Asia. Singapore: Fairfax Media Limited.

    Google Scholar 

  • Li, B., et al. 2005. Recent advances in TD-SCDMA, IEEE Communications Magazine, January: 30–37.

  • Linden, G. 2004. China standard time: A study in strategic industrial policy. Business and Politics, 6(3): 1–26.

    Article  Google Scholar 

  • Macinnes, I. 1994. A model for standard setting: High definition television. Contemporary Economic Policy, 12(4): 67–78.

    Article  Google Scholar 

  • Mattli, W., & Buthe, T. 2003. Setting international standards: Technology rationality or the primacy of power. World Politics, 56(1): 1–42.

    Article  Google Scholar 

  • McDonald, J. 2006. Chinese companies unveil video player with homegrown DVD technology. International Herald Tribune. Beijing: Associated Press.

    Google Scholar 

  • Nepelski, D., & De Prato, G. 2015. International technology sourcing between a developing country and the rest of the world. A case study of China. Technovation, 35: 12–21.

    Article  Google Scholar 

  • Parra-Requena, G., Ruiz-Ortega, M. J., & Garcia-Villaverde, P. M. 2013. Social capital and effective innovation in industrial districts: Dual effect of absorptive capacity. Industry and Innovation, 20(2): 157–179.

    Article  Google Scholar 

  • PeoplesDaily. 2003. China to issue home-developed EVD standard. People’s Daily. Beijing.

  • Potoski, M., & Prakash, A. 2009. Information asymmetries as trade barriers: ISO 9000 increases international commerce. Journal of Policy Analysis and Management, 28: 221–238.

    Article  Google Scholar 

  • Rouse, M. J., & Daellenbach, U. S. 1999. Rethinking research methods for the resource-based perspective: isolating sources of sustainable competitive advantage. Strategic Management Journal, 20(5): 487–494.

    Article  Google Scholar 

  • Sabrina, 2014. MIIT: Chinese mobile internet users reached 838 Million in January, 2014. China Internet Watch.

  • ShangwuZhoukan. 2007. Xinwei Shi’er Nian De Lunhui. Shangwu Zhoukan, 40–46.

  • Shapiro, C., & Varian, H. R. 1999. Information rules: A strategic guide to the network economy. Boston: HBS Press.

    Google Scholar 

  • Sherif, M. H. 2013. ICT standardization strategies and interactive learning spaces (ILS). In A New Wave in Global Standardization from Asia, International Workshop on Asia and Global Standardization, Seoul.

  • Simcoe, T., Graham, S. J. H., et al. 2009. Entrepreneurship, intellectual property and platform technologies. Journal of Economics & Management Strategy, 18(3): 775–816.

    Article  Google Scholar 

  • Sinocast. 2006. Chinese 3G equipment providers in talks on IP issues. Beijing: TD-Forum.

    Google Scholar 

  • Smith, T. 2003. China unveils ‘DVD killer’ video Disc format. The Register. London: Situation Publishing Ltd.

    Google Scholar 

  • SPTL. 2017. Apple sued for infringement on SEP. Shanghai: Shanghai Patent and Trademark Law Office LLC.

    Google Scholar 

  • Steen, H. U. 2011. Indicators of development or dependency in disguise? Assessing domestic inventive capacity in South Korean and Chinese infrastructural ICT standards. Telecommunications Policy, 35(7): 663–680.

    Article  Google Scholar 

  • Stewart, J. 2009. Mobile broadband: from 3G to 4G. China European Information Technology Standards Research Partnership.

  • Stewart, J., & Wang, C. 2009. Final report on standards dynamics in domain of mobile telephony: Mobile broadband from 3G to 4G. Edinburgh: University of Edinburgh.

    Google Scholar 

  • Sun, H. 2000. Total quality management. ISO 9000 certification and performance improvement. International Journal of Quality & Reliability Management, 17: 168–179.

    Article  Google Scholar 

  • Suttmeier, R., & Yao, X. 2004. China’s post-WTO technology policy: Standards, software, and the changing nature of techno-nationalism. Seattle: National Bureau of Asian Research.

    Google Scholar 

  • Suttmeier, R., Yao, X., & Tan, A. 2006. Standards of Power? Technology, institutions, and politics in the development of China’s National Standards Strategy. Seattle: The National Bureau of Asian Research.

    Google Scholar 

  • Teece, D. J. 1998. Capturing value from knowledge assets: The new economy, markets for know-how and intangible assets. California Management Review, 40(3): 55–79.

    Article  Google Scholar 

  • Thumm, N. 2005. Patents for genetic inventions: a tool to promote technological advance or a limitation for upstream inventions. Technovation, 25(12): 1410–1417.

    Article  Google Scholar 

  • Tsai, C. J., & Wang, J. H. 2011. How China institutional changes influence industry development? The case of TD-SCDMA industrialization, DRUID 2011 on Innovation, Strategy and Structure, Copenhagen Business School, June 15–17, 2011.

  • Utterback, J. M. 1996. Mastering the dynamics of innovation. Cambridge, MA: HBS Press.

    Google Scholar 

  • Vialle, P., Song, J., & Zhang, J. 2012. Competing with dominant global standards in a catching-up context. The case of mobile standards in China. Telecommunications Policy, 36: 832–846.

    Article  Google Scholar 

  • Wang, Y., & Li-Ying, Jason. 2014. When does inward technology licensing facilitate firms’ NPD performances? A contingency perspective. Technovation, 34: 44–53.

    Article  Google Scholar 

  • Wright, L. L., Lane, H. W., & Beamish, P. W. 1988. International management research: Lessons from the field. International Studies of Management and Organization, 18(3): 55–71.

    Article  Google Scholar 

  • Xia, J. 2011. The third-generation-mobile (3G) policy and deployment in China: Current status, challenges, and prospects. Telecommunications Policy, 35: 51–63.

    Article  Google Scholar 

  • Xia, J. 2012. Competition and regulation in China’s 3G/4G mobile communications industry – Institutions, governance, and telecom SOEs. Telecommunications Policy, 36(7): 503–521.

    Article  Google Scholar 

  • Xu, Y. 2003. 3G Mobile policy: The case of China and Hong Kong. International Telecommunications Union Case Studies.

  • Yin, R. K. 1989. Case study research: Design and methods. Beverly Hills, CA: Sage.

    Google Scholar 

  • Yu, J., Zhang, Y., & Gao, P. 2012. Examining China’s technology policies for wireless broadband infrastructure. Telecommunications Policy, 36: 847–857.

    Article  Google Scholar 

  • ZGJM. 2004. Gaozeng Zhang Beihou De Fansi – Dangqian Gaoxinjishu Chanpin Chukou Qiye Mianlin De Wenti Ji Duice. Beijing: Chinese Academy of International Trade and Economic Cooperation.

    Google Scholar 

  • Zhang, Y. 2008. Xiao Shou Yu Leng EVD Die Ji Nian Nei Yao ‘Tui Shi’ (Sales Run Cold: EVD Players Will Exit the Market Within the Year). Chengdu, China: Chengdu Shangbao.

    Google Scholar 

  • Zhao, Y. 2010. China’s pursuits of indigenous innovations in information technology developments: hopes, follies and uncertainties. Chinese Journal of Communication, 3(3): 266–289.

    Article  Google Scholar 

  • Zhou, T. 2004. China’s home grown CDMA systems: SCDMA/TD-SCDMA/LAS-CDMA. Southern California Monte Jade Science and Technology Association Advance Program Workshop: Emerging Technologies of Wireless Communication. Newport Beach, California.

Download references

Acknowledgements

We would like to thank the generous support of the National Science Foundation under Grant No. 0964907, and the University of South Carolina Center for International Business, Education and Research.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Michael Murphree.

Additional information

Accepted by Suma Athreye, Area Editor, 23 August 2018. This article has been with the authors for two revisions.

Rights and permissions

Reprints and Permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Murphree, M., Breznitz, D. Indigenous digital technology standards for development: The case of China. J Int Bus Policy 1, 234–252 (2018). https://doi.org/10.1057/s42214-018-0010-3

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s42214-018-0010-3

Keywords