Technological Capacity, Product Position, and Firm Competitiveness An Empirical Analysis

Using firm-level data from a 2009 survey conducted in Suzhou city, Jiangsu province, this article examines the impact of technological capacity and value-chain position on a firm's product competitiveness. Technological capacity and product competitiveness are self-assessed relative to other firms and products in the same industry. Position on the value chain is measured relative to a firm's position as an original-brand manufacturer or not. Our empirical results show that competitiveness rises with a firm's technological capacity and its position on the global value chain. This finding is consistent with the theoretical prediction. The article also investigates the determinants of technological capacity and value-chain position, including the firm's size, research and development (R&D) spending, location dummies, educational level of technical and managerial personnel, wages of technical and managerial personnel, and enterprise ownership. Bootstrapping, probit, and linear probability regression models are employed.