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What matters for industrial innovation in China: R&D, technology transfer or spillover impacts from foreign investment?

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  • Yifei Sun

Abstract

This study examines the relationship between industrial output and in-house R&D, technology transfer and spillovers from foreign investment in China using the most recent economic census data (2004) published by the Chinese State Statistical Bureau in 2006. It reveals that none of the three factors – in-house R&D, technology transfer and spillovers from foreign investment – can effectively explain the sectoral differences of output. The study also reveals that capital and state-owned enterprises (SOEs) show consistent and significant impacts on output, where capital demonstrates positive impacts while SOEs show negative impacts. Also interesting is that the impact of export on industrial differences of output is insignificant, though still positive. Such results cast serious doubts on the sustainability of China's strategy of relying on foreign investment, export and its recent innovation drive.

Suggested Citation

  • Yifei Sun, 2010. "What matters for industrial innovation in China: R&D, technology transfer or spillover impacts from foreign investment?," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 4(5/6), pages 621-647.
    • Handle: RePEc:ids:ijbsre:v:4:y:2010:i:5/6:p:621-647
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    Citations

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    Cited by:

    1. Shilpi Tyagi & D. K. Nauriyal & Rachita Gulati, 2018. "Firm level R&D intensity: evidence from Indian drugs and pharmaceutical industry," Review of Managerial Science, Springer, vol. 12(1), pages 167-202, January.
    2. Peng Zhang & Canfei He & Yifei Sun, 2014. "Agglomeration economies and firm R&D efforts: an analysis of China’s electronics and telecommunications industries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 671-701, November.
    3. Wang, Cassandra C. & Wu, Aiqi, 2016. "Geographical FDI knowledge spillover and innovation of indigenous firms in China," International Business Review, Elsevier, vol. 25(4), pages 895-906.

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