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Double-edged effects of the technology gap and technology spillovers: Evidence from the Chinese industrial sector

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  • Lai, Mingyong
  • Wang, Hua
  • Zhu, Shujin
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    Abstract

    This paper proposes a new insight that the technology gap plays double-edged roles in the technology spillovers of foreign direct investment (FDI) through two channels, technology choice set and technology absorptive capability. Applying a multiple-threshold model, we examine the non-linear relationship between the technology gap and technology spillovers based on the provincial panel data of the Chinese industrial sector during 1993-2006. The empirical results support the hypothesis of two thresholds, which are 0.3071 and 0.5214 in terms of the technology gap respectively. The estimated thresholds indicate the sufficient absorptive capability is the premise for FDI technology spillovers. Moreover, it implies the marginal decrease of FDI technology spillover effects in the long run.

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    Bibliographic Info

    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 20 (2009)
    Issue (Month): 3 (September)
    Pages: 414-424

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    Handle: RePEc:eee:chieco:v:20:y:2009:i:3:p:414-424

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    Web page: http://www.elsevier.com/locate/chieco

    Related research

    Keywords: FDI technology gap technology spillovers multiple-threshold model;

    References

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    Cited by:
    1. Zhang, Cheng & Guo, Bingnan & Wang, Jianke, 2014. "The different impacts of home countries characteristics in FDI on Chinese spillover effects: Based on one-stage SFA," Economic Modelling, Elsevier, vol. 38(C), pages 572-580.
    2. Zhang, Gupeng & Lv, Xiaofeng & Zhou, Jianghua, 2014. "Private value of patent right and patent infringement: An empirical study based on patent renewal data of China," China Economic Review, Elsevier, vol. 28(C), pages 37-54.

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