TITLE:
Technical Standards, Brand Reputation and Technological Innovation of Latecomers—A General Equilibrium Model Based on Information Asymmetry, Division of Labor and Specialization
AUTHORS:
Ke Li
KEYWORDS:
Technical Standards, Brand Reputation, Market Structure, Technological Innovation of Latecomers, Specialization and Division of Labor
JOURNAL NAME:
Theoretical Economics Letters,
Vol.16 No.6,
November
12,
2026
ABSTRACT: This paper utilizes the general equilibrium analysis of endogenous information cost and endogenous intermediate product specialization to study the conditions and principles of technology localization in developing countries. The model depicts a positive cycle mechanism between technical standards, brand reputation and enterprise technological innovation and R&D capabilities that will evolve together with the evolution of international division of labor network structure. The results show that: 1) the key to the commercialization of domestic technology is to maintain sufficient brand-building growth rate; 2) there is an optimal degree of consistency between technology latecomers and international technical standards, so as to realize technology localization in the change of equilibrium transaction structure; 3) the trade income of latecomers can always benefit from the increase in the degree of consistency between their own and international technical standards, yet the trade income of first-mover enterprises will experience phased fluctuations, and implement the strategy of improving technical standards to prevent latecomers. Based on the conclusions of this study, the author proposes a path for less developing economies to achieve technological innovation and improve the influence of international standard setting, as well as related policy arrangement.