Abstract

New quality productivity results from revolutionary breakthroughs in technology, innovative allocation of factors of production, and in-depth transformation and upgrading of industries. The question of whether and how new quality productivity facilitates latecomer firms’ technological catch-up has become an urgent research issue. This research uses a sample of A-share listed firms from 2011 to 2022 to examine new quality productivity’s effect on latecomer firms’ technological catch-up and investigate the underlying mechanism. The results show that the enhancement of new quality productivity significantly narrows the technology gap between latecomer firms and frontier firms, and empowers latecomers to achieve technological catch-up. The results remain robust after a series of tests, including those conducted via the propensity score matching method and the instrumental variables method, and an extended time window test. The mechanism test establishes that new quality productivity mainly promotes latecomer firms’ technological catch-up by enhancing the three-dimensional dynamic capabilities: absorption capacity, innovation capacity, and adaptive capacity. Further analysis reveals that the effect of new quality productivity on technological catch-up in latecomer firms is more prominent in the environments where market/technological uncertainty, slack resources, and executive political relationships exist. These findings open the black box of how new quality productivity empowers the technological catch-up of latecomers from the perspective of dynamic capabilities, providing practical suggestions for latecomer firms to cultivate and develop new quality productivity and achieve technological catch-up.