China & World Economy / 88–118, Vol. 31, No. 1, 2023
National Concentration of High-tech Products: The Second Great Divergence?
Bing Lu, Jiandong Ju, Xinding Yu
Abstract
Based on the product-country level trade data from 2004 to 2017, as well as the High-Tech Products Catalog from the US Census Bureau, this paper examines empirically the current phenomenon of “national concentration” in high-tech exports. The results show that the phenomenon of “national concentration” not only exists but also tends to be self-reinforcing. Compared with other products, the exports of high-tech products tend to be concentrated in certain countries, and this concentration trends were further strengthened after the global financial crisis of 2008–2009. The national concentration of R&D activities may be one of the important causes of the national concentration of high-tech products. This pattern remains robust when we further use the value-added export data and different definitions of high-tech products. We argue that the phenomenon of “national concentration” of high-tech exports may herald the arrival of the “Second Great Divergence” – the divergence between innovative and manufacturing activities – in the global economy.