The comparison of innovation activities and international trade effect in China and Japan in the era of knowledge economy. Empirical research on patents as an example
| DOI | https://doi.org/10.1108/17544400910994760 |
| Pages | 211-228 |
| Date | 02 October 2009 |
| Published date | 02 October 2009 |
| Author | Zhu Zeng |
| Subject Matter | Economics |
Trade effect in
China and Japan
211
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 2 No. 3, 2009
pp. 211-228
#Emerald Group Publishing Limited
1754-4408
DOI 10.1108/17544400910994760
The comparison of innovation
activities and international trade
effect in China and Japan in the
era of knowledge economy
Empirical research on patents as an example
Zhu Zeng
Economic School, Southwest University of Finance and Economics,
Sichuan, China
Abstract
Purpose – The purpose of this paper is to examine the relationship between p atent innovation
activities and foreign trade competitiveness and analyze China’s level of independent knowledge
innovation internationally, especially in comparison with Japan.
Design/methodology/approach – The approach takes the form of a statistical and econometric
analysis of granted patents and trade export effect of China and Japan, based on the monthly data of
foreign trade import and export and of patents granted by China’s national intellectual property
bureau in Japan and China, respectively, from 2004 to 2007.
Findings – Through Johansen’s co-integration test, Granger causality test and other methods, this
paper verifies that a country’s inventions can directly promote export trade, and its pulling effect is
more visible than the total patents. Tests also manifest that the innovative activities in Japan play a
more significant role in enhancing its exports than in China. Comparison of large amounts of data
shows that the gap between China and Japan on independent knowledge innovation is obvious.
Research limitations/implications – These imply that in the era of knowledge economy, a country’s
sustainable capacity for independent innovation is the key to trade and national competitiveness.
Practical implications – China urgently needs to build a national innovation system; make great
efforts to cultivate national competitive advantage centred on knowledge advantage; and improve its
overall competitive strength.
Originality/value – The paper assesses the importance of innovation activities represented by patents
from the quantitative view and the difference of impact degree between China and Japan.
Keywords China, Japan, Patents, Product innovation, Knowledge economy, Competitive advantage
Paper type Research paper
1. Introduction
In this era of knowledge economy, what decides a country’s comparative advantage and
competitive advantage is knowledge competitiveness, which refers to the capacity of
achieving sustainable economic growth, based on the production, dissemination and
application of knowledge and information, by means of knowledge innovation and
technological innovation, with high-tech industries as its backbone. In international trade
activities, ‘‘high-tech-intensive products’’ are becoming the main form of visible goods
trade. ‘‘Knowledge-intensive service trade’’ signalled by providing various kinds of
knowledge technology services is also developing rapidly and the reason why the new
trade barriers represented by technical barriers and green barriers are so popular is that,
they are much more subtle, complex and rational because of high-knowledge technolog y
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1754-4408.htm
This paper is the initial fruit of National Social Science Fund ‘‘Research on countermeasures to
promote China’s basic balance of international payments’’ (08BJL045), and is supported by the
innovative talents cultivation fund of SWUFE.
JCEFTS
2,3
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components. In contemporary international trade disputes, intellectual property issues will
become the mainstream, which has begun to be confirmed. All these factors are the
inevitable result of the arrival of the knowledge economy.
Therefore, in the future, a country’s competitive advantage will inevitably be reflected
on knowledge advantage. Knowledge and innovation are the characteristics of the present
era. Innovation is playing a more and more crucial role in today’s global competition, and it
is the main source of a country’s competitiveness. In the report of China’s 17th Party
Congress, Chinese President Hu Jintao emphasized improving the ability of independent
innovation and building an innovation-oriented country. This is the core of the national
development strategy and the key to enhancing the comprehensive national strength,
while the processes of practice, learning and knowledge building are the fundamentals of
innovation. Looking at the history of modern world development, Japan is undoubtedly
one of the innovation pioneers, taking the forefront in the world. Both China and Japan
are the economic powers in East Asia. Considering the complementarity of their
development levels, the similarity of their economic interests, the proximity of their
geographical location, the similarity of their cultural traditions, there are practical
guiding and referring meanings to comparatively study the relationship of knowledge
innovation activities and foreign trade competitiveness of the two countries. In this
regard, what China is in most need of is the research and development of high
knowledge-intensive scientific and technological production with independent
intellectual property rights. The innovation to be discussed in this paper is based on the
perspectives of combining knowledge innovation and independent innovation. Taking
into account the availability of data, while embodying the carrier of independent
knowledge innovation, ‘‘patents’’ is the best choice. This paper will take patents as an
example, and carry out the empirical analysis on the relationship between a country’s
innovationactivities and its trade competitiveness.
2. The empirical analysis of granted patents and trade export effect of
China and Japan
Patent data can be important in the analysis of innovation (Ar undel, 2001). Some
scholars believe that the patents, as innovation output indicators, have natural
limitations (Furman et al., 2002), because the patent tendencies are different in different
industries and regions during different periods. What different industries and
companies choose to register – patents or trade secrets – to protect innovation, depends
on which will better prevent competitors from imitating and which will bring greater
benefits (Arundel, 2001). Not all inventions are patentable and not all innovations will
apply for patents; different patent qualities are various, and the resulting economic
benefits are also beyond comparison. Nevertheless, the patent-related data are
available, closely related to innovation, and over the years patent standards have been
objective, changing slowly, so the patent is still a reliable indicator to measure
innovation activities (Acs et al., 2002).
Academia uses patent data to carry out extensive research on innovation activities.
Some scholars utilizepatents to analyze the relationship betweentechnological progress
and economic development from a macro perspective of view (Groshby, 2000) or to
estimate national or international innovation processes; some measure innovation from
the view of industry (Abraham and Moitra Soumyo, 2001); some scholars use patents to
help companies develop innovative strategies from micro perspective (Waterson, 1990;
Arundel, 2001); and some study the impact of technological innovation on international
trade patterns (Soete, 1987).
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