Economics and Business Economics Seminar (ECO): Myeongwan Kim, The University of Toronto

Abstract:

Standardization ensures compatibility but potentially shapes innovation by locking in certain technologies. Unlike other countries, the Chinese government coordinates its firms to advance specific domestic technologies in international standard-setting organizations (SSOs). This paper studies the impact of this policy on global innovation in 5G. In the SSO for 5G, which is an economically and geopolitically significant arena in which this policy is implemented, firms compete to have their patented technologies adopted as part of the 5G standards. Using a large language model, I build a new database linking SSO technical documents, 5G policy documents published by the Chinese government, and 5G patents. I show that the policy promotes Chinese technologies in areas where China lags behind foreign competitors. If adopted as standards, these lagging technologies become the basis for subsequent 5G innovation across countries, as measured by 5G patents in close textual alignment with the SSO documents describing these technologies. These follow-on patents account for two-fifths of total 5G patents filed worldwide after standardization. In addition, many of the promoted technologies span both civilian and military applications. China’s objectives in 5G extend beyond commercial interests.