International technology spillovers and innovation quality: Evidence from China

Abstract

International technology spillovers have important impacts on innovation quality. In this paper, we integrate three main sources of international technology spillovers – imports, inward foreign direct investment (FDI), and outward FDI – into the framework of China’s innovation quality. Accordingly, we empirically investigate the characteristics and channels of international technology spillovers that affect innovation quality. We find that, first, overall, the main sources of international technology spillovers that can significantly affect China’s innovation quality focus on imports and outward FDI, especially imports, which plays a more dominant role; second, the characteristics of technology spillovers vary across different regions, that is, imports promote innovation quality more significantly in eastern and western China than in the central region, where only outward FDI affects innovation quality significantly; third, the channels of these three kinds of international technology spillovers that affect innovation quality cannot be separated from R&D capital investment and R&D personnel input. Our study not only enriches the extant literature about international technology spillovers affecting innovation quality but also sheds light on how to achieve high-quality economic development in China.