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compelled Chinese firms to engage in technological and organizational innovations.
However, under the new R&D infrastructure with the new division of intellectual labor
on R&D activities, a significant part of the innovative knowledge for a new product or
service is broadly dispersed among research institutes, university labs, and firms. And
firms, which mainly conduct relatively low level goal-oriented research, may not be able
to master and control all the competencies required to develop a new product. Inter-
organizational R&D collaboration is thus indispensable in China. The decentralization
reform, however, has made local governments in some regions the initiators of R&D
collaboration.
Second, not as in the United States where inter-firm R&D collaboration is the
major type of inter-organizational R&D collaboration (Powell, Koput, and Smith-Doerr,
1996), it is collaboration between firms on the one hand and universities and government
research institutes on the other that is the most popular type of R&D collaboration in
reform era China. The reason may be related to the difference in the R&D infrastructures.
In the U.S., the research centers in some large high-tech firms are able to conduct all
levels of research. In China, the basic research, together with some of the higher level
goal oriented experimental research, is assigned to universities and government research
institutes while most of the firms in the relatively high technology industries can only do
some limited goal-oriented research.
The fact that inter-organizational R&D collaboration has substantial gains in
economic performance net of R&D expenditures and other important characteristics of a
firm as shown in table 3 suggests that a firm can do more than simply increasing in-house
R&D inputs. Firms to which R&D is important could participate in inter-organizational
Convention