Template-type: ReDIF-Paper 1.0 Author-Name: Hou, Jun Author-Email: hou@merit.unu.edu Author-Workplace-Name: UNU-MERIT Author-Name: Mohnen, Pierre Author-Email: mohnen@merit.unu.edu Author-Workplace-Name: UNU-MERIT, Maastricht University Title: Complementarity between in-house R&D and technology purchasing: evidence from Chinese manufacturing firms Abstract: In order to catch up with the technological frontier, firms, especially in developing countries, try to acquire technological advancement through internal R&D efforts as well as through external technology sourcing activities. This study tests the existence of a complementarity between in-house R&D and external technology acquisition in Chinese manufacturing firms. We show that the two sources of technological upgrading are complementary in stimulating product innovation across small and medium size manufacturing firms in China, but not in generating process innovation nor in achieving higher levels of labor productivity. Classification-JEL: O33 Keywords: R&D, technology purchasing, complementarity, China, manufacturing Series: UNU-MERIT Working Papers Creation-Date: 2011 Number: 2011-048 File-URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-048.pdf File-Format: application/pdf File-Size: 275 Kb Handle: RePEc:unm:unumer:2011048