Social Sciences in China (Chinese Edition)

No. 3, 2025

Industrial Chain Risks and Indigenous Innovation by Chinese Enterprises

(Abstract)

Zheng Shilin and Zhang Rongjia

Do industrial chain risk shocks merely impede Chinese enterprises’ technological progress, or do they compel breakthroughs in indigenous innovation? This question is investigated within the context of technological blockades with a focus on effects and underlying mechanisms. The findings reveal that industrial chain risk shocks have pushed Chinese upstream enterprises to enhance their capacity for indigenous innovation. Key mechanisms include incentives to fill domestic market gaps, pressure-driven innovation, and government support policies, with upstream indigenous innovation also generating spillover effects that benefit downstream enterprises. Amid the intensifying technological rivalry, it is imperative to promote self-reliance and self-strengthening in key sectors, refine policies for supporting domestic enterprises to achieve technological innovation, and foster international cooperation in industrial and supply chain, thereby accelerating the formation of an open innovation ecosystem.