DO EXPORTS OF INTERMEDIATE GOODS PROMOTE TECHNOLOGICAL ADVANCEMENT IN CHINA?

Abstract

ABSTRACT The paper establishes a theoretical framework from the view of a developing country to explain the effect of exported intermediated goods on productivity advancement, and presents the role difference between low and high tech-complexity industries. Fundamental and extended model are developed to estimate both aggregate and net technological effect, spillovers and technological advantage of exports in intermediate goods. Results show that: (1) Exports of intermediate goods exert a positive effect on technological progress, and those with high tech-complexity play a more important role than the ones with low tech-complexity. (2) Exports of intermediate goods have positive spillovers in high tech-complexity industries, and negative spillovers are found in low tech-complexity ones, crowding out the production of non-exports. (3) Exports of intermediate goods have remarkable technological advantage over non-exports, and it is especially significant in low tech-complexity industries. Therefore, it seems that there presents a negative correlation between spillovers and technological advantage in exports of intermediate goods. Keywords Intermediate goods; tech-complexity; spillovers; technological advantage