This paper asks whether the technological development of a nation reduces the inter‐regional hierarchy in knowledge flow. We examine two scenarios that are the alternative to each other. The first is what we call the globalization of regional innovation system/weakening of inter‐regional hierarchy scenario: As many regions develop their niches in the global economy, the national “anchor” region loses its relative importance as the importer and distributor of new knowledge, rendering the domestic inter‐regional hierarchy less significant as a result. The second scenario is the globalization of national innovation system/persistence of inter‐regional hierarchy. The nation’s traditional anchor region becomes even more active in importing technology and distributing it to other regions of the country. To test which scenario is closer to reality, we employ social network metrics to analyse inter‐regional technology diffusion networks using Chinese patent licensing data for the 1998–2013 period. Our findings support the second scenario, showing that the influence of the traditional anchor region persists in the hierarchical network structure as new cities enter the network. We found five anchor regions: the three usual suspects—Beijing, Shanghai and Shenzhen—plus two that were slightly less expected—Dongguan and Suzhou.

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While extant studies on brokerage address its structural competitiveness and network performance, few studies address the fundamental question of whether all the brokerage types have identical and positive effects on network development. Extending the Gould and Fernandez’s brokerage topology, the study measures the contribution of the brokerage roles over to the network evolution. For the purpose, the Chinese technology transfer flow networks were utilized to reveal the brokerage patterns of three anchor regions—Beijing, Shanghai, and Shenzhen. The analysis outlines that Beijing and Shenzhen, as nation-wide brokerage hubs, transmit the technology across the whole regions, while Shanghai seems to be a more balanced broker region connecting the neighbour regions with the others. The longitudinal simulation analysis demonstrates that a liaison-type brokerage function, connecting the heterogeneous knowledge sources, contributes to the growth of the regional network.

Despite market-mediated technology becoming a key source for a region's innovation and growth, the literature on spill-over across geographical space has not discerned between compensated technology transfer from pure knowledge spill-over. Drawing on the conflicting motivations between the technology supplier (licensor) and the demander (licensee) in the licensing market transaction, this critical review highlights the contrary preference for geographical proximity, separating market-mediated technology spill-overs from knowledge spill-overs. This paper argues that licensing firms might shun co-located licensees to avoid potential dissipation risk, while the purchaser prefers vicinity partners to avert opportunistic behaviour. Micro-level mechanisms of transferring compensated technology are of particular significance in enhancing the efficiency of the regional innovation system, providing an insight into why some geographical clusters are not efficient.

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