The ability of a company to absorb new technologies depends on its absorptive capacity, or its capacity to identify, import, and apply new technologies. In this paper, we define the absorptive capacity as a process that includes several stages. We discuss the obstacles and practices that impede the absorption of external knowledge, and suggest a conceptual framework to overcome these barriers. We will then discuss the steps involved in the technology absorption process.
To estimate the role of technology absorption, we use sample data from 30 provinces in China, excluding Tibet and Taiwan. We analyze the role of technology absorption and the impact of the technology itself on regional economic growth. We use the technology transaction contracts in different regions of China to determine whether a certain region has a greater capacity to absorb technology. We find that China is highly absorbing technology in its regions, and that its absorption has a corresponding effect on economic growth.
The economic growth model based on the Cobb-Douglas production function has a general form that reflects the growth rate of a regional economy. This model explains economic growth by separating the contribution rate of technological progress from that of human input and capital stock. To test the model, we use the Cobb-Douglas production function and a regression coefficient called Bi to assess the impact of technology absorption on economic growth. The results suggest that technology absorption promotes regional economic growth in the technological input areas.
To promote regional economic growth, technology absorption should be promoted in the technology input regions and facilitated by a sound service system for technology transfer and dynamic integration with local innovation resources. In addition, it is necessary for the technology output areas to build sound technology transfer platforms in order to strengthen their own transfer of technology resources. This requires that narrow-minded local protectionism of technology innovation must be abandoned in order to encourage cross-regional technology transfer. If all of these steps are taken, the absorption of technology by enterprises will promote sustainable regional economic growth.