IDEAS home Printed from https://ideas.repec.org/a/eee/teinso/v81y2025ics0160791x25000545.html
   My bibliography  Save this article

The impact of international technology spillovers on digital inequality in China

Author

Listed:
  • Feng, Wei
  • Yuan, Hang

Abstract

China's digital economy faces development bottlenecks caused by digital inequality. Does a region's ability to absorb international technology spillovers affect its digital divide? Using development data from 271 prefecture-level and above cities in China from 2014 to 2020, we employ a fixed-effects model to empirically examine the characteristics and mechanisms of international technology spillovers that affect digital inequality. We find that international technology spillovers through the import channel and outward foreign direct investment (OFDI) can widen digital inequality. Specifically, international technology spillovers through the import channel amplify digital inequality by expanding the inequality in economic growth and infrastructure, while those through the OFDI channel exacerbate it by expanding inequality in fiscal revenue and financial development. Cities across different economic regions, administrative levels, and resource endowments experience varied impacts of international technology spillovers on digital inequality. We also conduct robustness checks using the instrumental variable method and further explore spatial correlation using Spatial Durbin Model (SDM), Spatial Autoregressive Model (SAR), and Spatial Error Model (SEM). These findings enrich the study of digital inequality through the lens of international technology spillovers and encourage China to address the digital divide by fostering regional economic coordination.

Suggested Citation

  • Feng, Wei & Yuan, Hang, 2025. "The impact of international technology spillovers on digital inequality in China," Technology in Society, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:teinso:v:81:y:2025:i:c:s0160791x25000545
    DOI: 10.1016/j.techsoc.2025.102864
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0160791X25000545
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techsoc.2025.102864?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Linnea Löfving & Viktoria Kamuf & Timothy Heleniak & Sabine Weck & Gustaf Norlén, 2022. "Can digitalization be a tool to overcome spatial injustice in sparsely populated regions? The cases of Digital Västerbotten (Sweden) and Smart Country Side (Germany)," European Planning Studies, Taylor & Francis Journals, vol. 30(5), pages 917-934, May.
    2. Bruno Van Pottelsberghe De La Potterie & Frank Lichtenberg, 2001. "Does Foreign Direct Investment Transfer Technology Across Borders?," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 490-497, August.
    3. Aarstad, Jarle & Kvitastein, Olav A. & Jakobsen, Stig-Erik, 2016. "Related and unrelated variety as regional drivers of enterprise productivity and innovation: A multilevel study," Research Policy, Elsevier, vol. 45(4), pages 844-856.
    4. Xiaolan Fu, 2008. "Foreign Direct Investment, Absorptive Capacity and Regional Innovation Capabilities: Evidence from China," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 89-110.
    5. Chen, Xiaohui & Teng, Lei & Chen, Wen, 2022. "How does FinTech affect the development of the digital economy? Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 61(C).
    6. Hong, Xianna & Chen, Qiuhua & Man, Danlu & Shi, Chenyong & Wang, Nan, 2024. "The impact of digitalization on the rich and the poor: Digital divide or digital inclusion?," Technology in Society, Elsevier, vol. 78(C).
    7. Lin, Mi & Kwan, Yum K., 2016. "FDI technology spillovers, geography, and spatial diffusion," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 257-274.
    8. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    9. Feng, Wei & Li, Jiajia, 2021. "International technology spillovers and innovation quality: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 289-308.
    10. Niu, Geng & Jin, XiaoShu & Wang, Qi & Zhou, Yang, 2022. "Broadband infrastructure and digital financial inclusion in rural China," China Economic Review, Elsevier, vol. 76(C).
    11. Biyun Ren & Liuying Li & Hongmei Zhao & Yunbo Zhou, 2018. "The Financial Exclusion In The Development Of Digital Finance — A Study Based On Survey Data In The Jingjinji Rural Area," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(01), pages 65-82, March.
    12. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    13. Jerry Hausman, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    14. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    15. Adriana Peluffo, 2015. "Foreign Direct Investment, Productivity, Demand for Skilled Labour and Wage Inequality: An Analysis of Uruguay," The World Economy, Wiley Blackwell, vol. 38(6), pages 962-983, June.
    16. Wang, Di & Zhou, Tao & Wang, Mengmeng, 2021. "Information and communication technology (ICT), digital divide and urbanization: Evidence from Chinese cities," Technology in Society, Elsevier, vol. 64(C).
    17. Liu, Yang & Luan, Lin & Wu, Weilong & Zhang, Zhiqiang & Hsu, Yen, 2021. "Can digital financial inclusion promote China's economic growth?," International Review of Financial Analysis, Elsevier, vol. 78(C).
    18. Azmat Gani & Frank Scrimgeour, 2019. "Can trading partner cultural diversity explain trade?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 24(2), pages 313-327, April.
    19. Frank Lichtenberg & Bruno van Pottelsberghe de la Potterie, 1996. "International R&D Spillovers: A Re-Examination," NBER Working Papers 5668, National Bureau of Economic Research, Inc.
    20. Chenjian Zhang, 2022. "Formal and informal institutional legacies and inward foreign direct investment into firms: Evidence from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1228-1256, August.
    21. He, Yuan & Li, Ke & Wang, Yipan, 2022. "Crossing the digital divide: The impact of the digital economy on elderly individuals’ consumption upgrade in China," Technology in Society, Elsevier, vol. 71(C).
    22. Atif, Syed Muhammad & Endres, James & Macdonald, James, 2012. "Broadband Infrastructure and Economic Growth: A Panel Data Analysis of OECD Countries," EconStor Preprints 65419, ZBW - Leibniz Information Centre for Economics.
    23. V. Licio & A.M. Pinna & L. De Benedictis, 2018. "The long-term effects of the historical Roman road network: trade costs of Italian provinces," Working Paper CRENoS 201801, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    24. Ning, Lutao & Wang, Fan & Li, Jian, 2016. "Urban innovation, regional externalities of foreign direct investment and industrial agglomeration: Evidence from Chinese cities," Research Policy, Elsevier, vol. 45(4), pages 830-843.
    25. Perkins, Dwight Heald, 1988. "Reforming China's Economic System," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 601-645, June.
    26. Jacek Pietrucha & Rafał Żelazny, 2020. "TFP spillover effects via trade and FDI channels," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 33(1), pages 2509-2525, January.
    27. Gene M. Grossman & Elhanan Helpman, 1993. "Innovation and Growth in the Global Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262570971, December.
    28. Zilian, Stella Sophie & Zilian, Laura Samantha, 2020. "Digital inequality in Austria: Empirical evidence from the survey of the OECD “Programme for the International Assessment of Adult Competencies”," Technology in Society, Elsevier, vol. 63(C).
    29. Wang, Weihua & Zhang, Yuting & Zhao, Junjie, 2023. "Technological or social? Influencing factors and mechanisms of the psychological digital divide in rural Chinese elderly," Technology in Society, Elsevier, vol. 74(C).
    30. Jiang, Mingrui & Luo, Sumei & Zhou, Guangyou, 2020. "Financial development, OFDI spillovers and upgrading of industrial structure," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    31. Peng, Zhuangzhuang & Dan, Ting, 2023. "Digital dividend or digital divide? Digital economy and urban-rural income inequality in China," Telecommunications Policy, Elsevier, vol. 47(9).
    32. Song, Zhouying & Wang, Chen & Bergmann, Luke, 2020. "China’s prefectural digital divide: Spatial analysis and multivariate determinants of ICT diffusion," International Journal of Information Management, Elsevier, vol. 52(C).
    33. Herd,Richard, 2020. "Estimating Capital Formation and Capital Stock by Economic Sector in China : The Implications for Productivity Growth," Policy Research Working Paper Series 9317, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hong, Xianna & Chen, Qiuhua & Man, Danlu & Shi, Chenyong & Wang, Nan, 2024. "The impact of digitalization on the rich and the poor: Digital divide or digital inclusion?," Technology in Society, Elsevier, vol. 78(C).
    2. Zhang, Wenyue & Sun, Chuanwang, 2024. "Do multinational enterprises’ overseas investment activities promote their green transition performance? Evidence from Chinese listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 594-608.
    3. Imran Shah & Linyu He & Richard Hatfield & Mohamed Haroon, 2020. "Outward FDI: National and Regional Policy Implications for Technology Innovation," Department of Economics Working Papers 77/20, University of Bath, Department of Economics.
    4. Griffith, Rachel & Redding, Stephen & Simpson, Helen, 2002. "Productivity Convergence and Foreign Ownership at the Establishment Level," CEPR Discussion Papers 3765, C.E.P.R. Discussion Papers.
    5. Zhang, Wenyue & Li, Jianan & Sun, Chuanwang, 2022. "The impact of OFDI reverse technology spillovers on China's energy intensity: Analysis of provincial panel data," Energy Economics, Elsevier, vol. 116(C).
    6. Pan, Xiuzhen & Wei, Zixiang & Han, Botang & Shahbaz, Muhammad, 2021. "The heterogeneous impacts of interregional green technology spillover on energy intensity in China," Energy Economics, Elsevier, vol. 96(C).
    7. Xie, En & Lin, Jiaxin & Zou, Honghui, 2025. "How does outward FDI in developed economies affect the R&D of emerging economy firms? An attention-based view," Journal of International Management, Elsevier, vol. 31(1).
    8. Gwanghoon Lee, 2005. "International R&D Spillovers Through Information Networks," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 151-164, June.
    9. Lee, Gwanghoon, 2006. "The effectiveness of international knowledge spillover channels," European Economic Review, Elsevier, vol. 50(8), pages 2075-2088, November.
    10. Paul J.J. Welfens & Tian Xiong, 2018. "The Effects of Foreign Direct Investment on Regional Innovation Capacity in China," EIIW Discussion paper disbei247, Universitätsbibliothek Wuppertal, University Library.
    11. Songping Zhu & Azhong Ye, 2018. "Does the Impact of China’s Outward Foreign Direct Investment on Reverse Green Technology Process Differ across Countries?," Sustainability, MDPI, vol. 10(11), pages 1-19, October.
    12. Luh, Yir-Hueih & Jiang, Wun-Ji & Huang, Szu-Chi, 2016. "Trade-related spillovers and industrial competitiveness: Exploring the linkages for OECD countries," Economic Modelling, Elsevier, vol. 54(C), pages 309-325.
    13. De la Peña Zarzuelo, Ignacio & Freire-Seoane, María Jesús & López-Bermúdez, Beatriz, 2020. "The effects of maritime container transport on economic growth in the countries on the west coast of Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    14. Malick Souare, 2013. "Productivity growth, trade and FDI nexus: evidence from the Canadian manufacturing sector," The Journal of Technology Transfer, Springer, vol. 38(5), pages 675-698, October.
    15. Feng, Wei & Li, Jiajia, 2021. "International technology spillovers and innovation quality: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 289-308.
    16. Li, Xinxing & Phromphithakkul, Wasin & Sun, Hongzhou, 2025. "Digital economy, internet usage, and resident satisfaction," Finance Research Letters, Elsevier, vol. 77(C).
    17. Jinwen Qiu & Wenjian Liu & Ning Ning, 2020. "Evolution of Regional Innovation with Spatial Knowledge Spillovers: Convergence or Divergence?," Networks and Spatial Economics, Springer, vol. 20(1), pages 179-208, March.
    18. Sultana, Nasrin & Turkina, Ekaterina, 2020. "Foreign direct investment, technological advancement, and absorptive capacity: A network analysis," International Business Review, Elsevier, vol. 29(2).
    19. Campbell, Randall C. & Nagel, Gregory L., 2016. "Private information and limitations of Heckman's estimator in banking and corporate finance research," Journal of Empirical Finance, Elsevier, vol. 37(C), pages 186-195.
    20. Mehzabin Tuli, Farzana & Mitra, Suman & Crews, Mariah B., 2021. "Factors influencing the usage of shared E-scooters in Chicago," Transportation Research Part A: Policy and Practice, Elsevier, vol. 154(C), pages 164-185.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:teinso:v:81:y:2025:i:c:s0160791x25000545. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/technology-in-society .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.