Dynamic interactions between assimilation capacity, technology spillovers, sales and R&D intensity - the case of electrical machinery industry in Japan

In light of the significant technology inducement of a dynamic game among leading high-tech firms, and also of the leading role of assimilation capacity (the ability to utilize technology) for this game, numerical analyses and empirical demonstrations are attempted, taking Japan's 24 leading electrical machinery firms over the last two decades. On the basis of the intensive analyses, specific techno-sales structure of the industry are identified including (i) explicit division of two groups according to firms size by sales in which smaller firms cannot manage to jump up to the bigger firms group, and (ii) continuous decrease in R&D intensity starting particularly from the middle of the 1980s. In addition, sources compelling leading electrical machinery firms to such a techno-sales structure are identified in a context of dynamic interactions between assimilation capacity, technology spillovers, sales and R&D intensity. These findings provide significant policy implications suggesting that the identification of optimal dependency between indigenous technology and spillover technology in a global technology spillover context is urgent. (C) 2002 Elsevier Science Ltd. All rights reserved.