Globalization and Regional Innovation in China
AbstractThis paper explores the connection between the external opening of China and differences in innovation across Chinese regions. Controlling for locational advantages and fixed regional characteristics, for the period 1995-2010 overall we find that regions that have increased most the connections to the world market have become more innovative when compared to other regions. By interacting regional characteristics with openness, we find a U-shaped relation between regional income levels and innovation, where both the lower middle-income and the most advanced regions gain from globalization in terms of increased innovation and productivity. In relative terms, the higher middle-income regions gain less from globalization than the other regions. By examining the nature of international activities across regions, we conjecture that differences in the ownership structures of foreign investments and the nature of linkages between foreign and domestic firms are at the hart of this finding, as the higher middle-income regions have higher outsourcing levels and thus benefit less from foreign technology transfers.
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Bibliographic InfoPaper provided by Utrecht School of Economics in its series Working Papers with number 12-15.
Length: 26 pages
Date of creation: Sep 2012
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Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-CSE-2012-09-22 (Economics of Strategic Management)
- NEP-DEV-2012-09-22 (Development)
- NEP-GEO-2012-09-22 (Economic Geography)
- NEP-INO-2012-09-22 (Innovation)
- NEP-TRA-2012-09-22 (Transition Economics)
- NEP-URE-2012-09-22 (Urban & Real Estate Economics)
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