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This article explores the development process of regulatory innovation during the stages of upgrading innovation based technology for late industrialized countries. Using three cases of complex products in the nuclear industry, with special reference to (South) Korea, we investigate the regulatory innovation and formation process between regulators and developers. Although exploratory, this study shows that when the technical characteristics of a product are similar to those of existing platforms, minor institutional innovation is settled easily. On the contrary, as the discontinuity of a product technology increases, it becomes more likely that the lock-in effect of existing institutional schemes will hinder innovation. This paper contributes to the technology upgrading literature by highlighting the considerable importance of institutional capabilities. • Regulatory innovation is critical for industrial upgrading in latecomers. • Co-evolution of technology and regulation is critical for upgrading process. • Successful regulatory innovation occurs in incremental technological change. [ABSTRACT FROM AUTHOR]

Highlights: [•] Paper presents post-catch-up innovation activities in Korea based on case studies. [•] Approached from coevolution of PLC and national innovation system. [•] Three directions were observed: Deepening process, architectural, and radical innovations. [•] Also catch-up sys may act as obstacle to transition due to institutional rigidity. [•] Suggests the need for new expansion of the existing PLC theory for latecomers. [Copyright &y& Elsevier]

Investigates the evolution of technological capabilities of semiconductor firms in South Korea. Definition of technological capabilities in the context of latecomer firms; Empirical data analysis of chaebol firms; Rate and direction of technological capability enhancement.