Navigating across cross-border regional innovation systems : institutional entrepreneurs in China's Greater Bay Area

Abstract

Science, technology, and innovation (STI) through entrepreneurial activities contribute to socio-economic development and transitioning to knowledge-based economies. New technologies in globalized nascent markets, such as artificial intelligence, high-end engineering, and biotechnology, call for comprehensive cross-border STI cooperation. However, cooperation under high uncertainties is never easy. Most studies focus on formal institutions and centralized governance mechanisms in homogeneous institutional settings, or patent data to study cross-border cooperation and property rights protections. But scarce research explores how informal institutions and decentralized governance mechanisms in heterogeneous institutional environments leverage impacts on cross-border cooperation and knowledge as common goods. Cross-border STI cooperation could be more complex because borders can hinder knowledge flows, hamper labour mobility, and reduce access to critical resources. Facing interactive equilibriums of formal and informal institutions in a cross-border setting, how do individual agents navigate across heterogeneous institutional systems to solve collective action problems in nascent markets under high uncertainty? Why can some actors overcome institutional obstacles to launch and sustain cooperation while others cannot? Building upon a growing literature in Cross-border regional innovation systems (CBRISs)—innovation systems spanning neighbouring economies of different jurisdictions—and the institutional analysis and development (IAD) framework developed by Ostrom and her colleagues, this thesis proposed that strategic actors in nascent markets could function as institutional entrepreneurs to proactively navigate institutional gaps and seek solutions for cross-border social dilemmas in polycentric and heterogeneous institutional environments such as China's Greater Bay Area (GBA). The thesis develops a cross-border institutional analysis and development (CBIAD) framework emphasizing three aspects that influence strategic actors' actions in CBRISs: 1) the attributes of knowledge complexity and fungibility, 2) the attributes of the community involved, and 3) rule-in-use in CBRISs. The kernel of this thesis is to understand the emergence of institutional entrepreneurs, their specific roles (rule-follower, rule-maker), and subtypes (protective, productive, and hybrid), and governance mechanisms used by them to sustain cooperation. It then applies the CBIAD framework in two different types of social dilemmas for cooperation in China's Greater Bay Area: a stag-hunt game and prisoners' dilemma. It finds that institutional entrepreneurs employ a dynamic combination of formal and informal institutions, such as priority contracts, joint funding schemes, and mentor-mentee networks when facing different social dilemmas. In each social dilemma, embedded case studies in three relevant fields with distinctive knowledge attributes and cooperation strategies are examined and compared: 1) artificial intelligence (open-sourced), 2) high-end engineering (hybrid), and 3) biotechnology (highly privatized) through a qualitative approach, including 28 in-depth semi-structured interviews, 1 focus group discussion, and 6 on-site observations with people who participated in cross-border STI activities, archival research, content analysis, and field observations from February 2021 to February 2023. The thesis seeks to contribute to the conceptualization and empirical support of CBRISs, Ostrom's legacies in polycentric governance and knowledge commons, and emerging literature on solving social dilemmas in joint-value creations. The findings and policy implications could be generalizable and beneficial to other CBRISs, such as those in European countries, between the U.S. and Mexico, and between Singapore and Malaysia.