Knowledge Activities of External Knowledge Network and Technological Capability: Evidence from China

This study investigates the effects of knowledge activities including knowledge acquisition, knowledge cooperation, and knowledge transaction based on external knowledge network on the firm’s technological capability. Using the statistical data of China, the paper employs the negative binomial regression random-effects model to study the effects of knowledge activities on technological capability. Results show that knowledge cooperation between firm and research institutions and/or universities has a statistically significant relation with technological capability. The variable of knowledge transaction that is the firm’s technology contract deals by category of technology buyer positively influences the technological capability growth, and another variable that is the technology contracts imported by the type of technology importer also shows this effect. With respect to knowledge acquisition, the results show that the acquisition of foreign technology is not associated with firms’ technological capabilities, while the purchase of domestic technology has a positive impact.