Owner Risk Averse and Enterprise Technological Innovation Mode: Focus on Major Equipment Manufacturing Industry

Abstract

Major equipment manufacturing industry is the strategic industry of national defense construction. In the 1990s, China began implementing the "market for technology" strategy, but the strategy did not achieve the desired results, for the important technology and equipment is still highly dependent on imports. The paper analyses the risk aversion characteristics of the owners to purchase, and points out that the risk aversion characteristics comes from the product attributes of important equipment manufacturing industry and asymmetric information. Then it elaborates a dynamic game model to study on the choices of the enterprise’s technological innovation modes in the major equipment manufacturing industry. Finally, the paper concludes that under the strong risk aversion constraints, rational companies will choose collaborative innovation instead of independent innovation.