The Comparative Advantage Analysis of of Innovation in the Pearl River Delta Region:from the Institutional Embeddedness Perspective

The innovation mode in the Pearl River Delta (PRD) region is mainly incremental innovation, which is characterized by such features as bottom-up, specialization and diversity. Based on the innovation research into local governments and enterprises in the PRD region, the paper finds out that the comparative advantage of innovation in the PRD region lies in the incremental innovation mode as well as the favorable institutional environment in which it is embedded. The incremental innovation in the region does not rely on abundant S&T resources and strong R&D capacity, but rather local formal and informal institutions, including high degree of marketization, clustering, internationalization, and favorable local innovation policy system as well as unique Lingnan cultural. These institutions are highly compatible and closely coupled with each other, prohibiting and facilitating the innovation behavioral selection of various innovation actors. Based on the research findings, the paper proposes a series of policy recommendations to further strengthen the comparative advantage of innovation in the PRD region.