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International technology transfer and domesticinnovation: evidence from the high-speed rail sector inChina

Author

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  • Lin, Yatang
  • Qin, Yu
  • Xie, Zhuan

Abstract

How does the transfer of advanced technology spur innovation in developing countries? This paper exploits the large-scale introduction of high-speed railway (HSR) technology into China in 2004 as a natural experiment to address this question. The experiment is unique in the sense that this wave of technology transfer is large, abrupt and arguably exogenous in timing, covering a variety of technology classes and a large number of geographically-dispersed railway-related firms. With detailed information on the types of technology transferred and the identities of the receiving firms, as well as their product market specializations, we are able to depict a clear picture of how foreign technology is digested and spurs follow up innovation in and out of directly receiving firms. Our findings suggest that technology transfer leads to significant growth in HSR-related patents in cities with direct receivers of imported technology after 2004 in a triple-difference estimation. We also observe sizable spill overs to firms that are not directly related to the railway industry. Technology similarity plays an important role in technology diffusion, but we do not observe any significant impacts of geographic proximity. Previous university research strength in relevant fields is also conducive to stronger technology spill overs.

Suggested Citation

  • Lin, Yatang & Qin, Yu & Xie, Zhuan, 2015. "International technology transfer and domesticinnovation: evidence from the high-speed rail sector inChina," LSE Research Online Documents on Economics 66057, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:66057
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    File URL: https://researchonline.lse.ac.uk/id/eprint/66057/
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    Cited by:

    1. Long, Fenjie & Zheng, Longfei & Song, Zhida, 2018. "High-speed rail and urban expansion: An empirical study using a time series of nighttime light satellite data in China," Journal of Transport Geography, Elsevier, vol. 72(C), pages 106-118.
    2. Richard Pomfret, 2020. "Global Production Networks, New Trade Technologies and the Challenge for International Institutions," Foreign Trade Review, , vol. 55(1), pages 21-41, February.
    3. Kersan-Škabić Ines, 2021. "Information and Communication Technology Development and Foreign Trade in the Region of South-East Europe," South East European Journal of Economics and Business, Sciendo, vol. 16(2), pages 101-113, December.
    4. Jian Gao & Bogang Jun & Alex Sandy Pentland & Tao Zhou & Cesar A. Hidalgo, 2017. "Collective Learning in China's Regional Economic Development Formations of Co-Inventors During the Dot-com Bubble in the Research Triangle Region," Papers in Evolutionary Economic Geography (PEEG) 1706, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2017.
    5. Zou, Wei & Chen, Liangheng & Xiong, Junke, 2021. "High-speed railway, market access and economic growth," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 1282-1304.
    6. Jian Gao & Bogang Jun & Alex Sandy Pentland & Tao Zhou & Cesar A. Hidalgo, 2017. "Collective Learning in China's Regional Economic Development," Papers 1703.01369, arXiv.org.

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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