Do capital goods imports improve the quality of regional development? Evidence from Chinese cities

Abstract

For developing countries with advanced societies and growing economies, it is essential to accurately assess the technological innovation effect of capital goods imports on regional development quality. This study explores the path of high-quality urban development from the perspective of international trade. Examining city-level panel data on China from 2003 to 2013, the study applies various econometric analysis methods, including fixed effects, quantile regression, two-stage least squares regression and mediating and moderating effects models, to investigate the impact of capital goods imports on regional development quality and the mechanism of action. The findings demonstrate that capital goods imports have an inverted U-shaped, non-linear effect on high-quality urban development, whereas the effect on regional development is characterised by urban heterogeneity. Regarding technological innovation, the primary reason for the inverted U-shaped relationship is the combined effects of technology dependence and technology upgrading. In terms of institutional economics, policymakers can transform the pressure of economic growth into a driving force through initiatives to enhance the economic development effect of capital goods imports. Transitioning this pressure can mitigate the hindering effect of excessive capital goods imports on improving the quality of regional development.