Research On Product Innovation Of Latecomer Firms Based On Technological Learning Mode

In the knowledge era, technological learning plays a vital role in a firm's development. This role is significant because technological learning is linked to a firm's ability to innovate. This research depicts the competition among latecomer firms adopted different technological learning modes based on vertical product differentiation, as to investigate the impact of technological learning modes on latecomer firms' product innovation.According to the characteristics of latecomer firms and the current situation of product innovation in China, we categorizes enterprises into three technological learning modes, namely independent research and development mode(independent R&D mode), external acquisition mode and Shanzhai mode. These modes vary in the timing of entry, costs, risks and outcomes, while the timing of entry and costs are the focus of this research.In terms of the timing of entry, we established a three-period game based on the entry timing of latecomer firms adopted different technological learning mode. We analyzed latecomer firms' product innovation decisions in the case of high-quality leadership, where the first entrant supplied high quality product, and low-quality leadership, where the first entrant supplied low quality product. We found out that, latecomer firms' innovation decisions depend on factors including the exogenous product quality of the firm adopted external acquisition mode, discounted rate and the upper bound of quality level. Firms adopted independent R&D mode and Shanzhai mode have higher incentive to innovation under low-quality leadership. And the potential entry of Shanzhai firms reduces the innovation incentive of firms adopted independent R&D mode under high-quality leadership, while has little influence on the innovation incentive of firms adopted independent R&D mode under low-quality leadership.As to technological learning costs, we investigate the impact of asymmetric learning costs on firms' product innovation under high-quality leadership and low-quality leadership respectively. We developed an entry game with one incumbent, the firm adopted external acquisition mode, and two potential entrants, firms adopted independent R&D mode and Shanzhai mode. Particularly, we analyzed the impact of several key factors on latecomer firms' product innovation decision, including the exogenous product quality of the firm adopted external acquisition mode, technological learning cost parameter and technological spillover parameter.We found out that, the exogenous factors imposed different impact on the product innovation decisions of latecomer firms adopted different technological learning mode in different phase and circumstances.