Technology-forcing regulation and the shifting geography of innovation with a focus on China

This seminar evaluates how technology-forcing regulations related to the clean energy transition influence the geography of innovation in the automotive industry, with a focus on China. 

Professor Ari Van Assche will present his co-authored paper "When the Music Changes, So Must Your Dance: Technology-Forcing Regulation and the Shifting Geography of Innovation", with a focus on China.

Around the globe, governments have in the past decades enacted stringent environmental policies to phase out fossil fuel cars in favour of zero-emission vehicles (ZEVs), pushing car manufacturers to rapidly develop radical innovation capabilities to become competitive in ZEVs. Building on the radical innovation and knowledge connectedness literature, we theorize that car manufacturers develop these innovation capabilities by strategically reconfiguring their geography of innovation toward hotspot locations that are specialized in ZEV technologies. We also explore how firms in China and other countries reconfigure their R&D collaboration strategies towards these specialized locations.

We use a comprehensive dataset (1990-2020) consisting of more than half a million patent families from original equipment manufacturers (OEMs) and suppliers in the Chinese and global automotive sector to validate our theoretical predictions. Our results show that incumbent car manufacturers have significantly shifted their geography of innovation towards locations specialized in ZEV technologies and that OEMs and laggards in ZEV technology have shifted more rapidly than suppliers. Also, our results demonstrate that over time, incumbents' collaboration with specialized locations in ZEV technologies has increased. We discuss the implications of our findings for research on the geography of innovation and mission-oriented innovation policy.