Abstract: What institutional advantages can China’s mixed ownership industrial system provide for technological innovation? The institutional environment in which state-owned enterprises and private enterprises operate is different in terms of governance structure, financial relations, labor relations, organizational networks. Different institutional environments shape different innovation advantages for enterprises. The state-owned enterprises usually can pursue long-term goals, own patient capital, and have stable employment and coordination networks, and thus have more advantages in the innovations in “long-cycle technology”. In contrast, private enterprises are usually more responsive to market and more flexible in adjusting its production networks, and thus have more advantages in the innovations in “short-cycle technology”. Therefore, the Chinese-styled innovation system with state-owned and private enterprises, provides a unique advantage in full-range technological innovations, which embodies a different path of modernization.

Keywords: technological innovation; varieties of institutions; technological cycle; state-owned enterprises; private enterprises