The impact of R & D elements flow and government intervention on China’s hi-tech industry innovation ability

Abstract

ABSTRACT Despite the established correlation between research and development (R&D) investment and innovation capability, the correlation between China’s hi-tech industry R&D elements flow and its innovation capability remains unclear. This thesis aims to investigate the correlation between R&D elements flow and China’s hi-tech industries’ innovation ability by using appropriate spatial econometric methods and dynamic threshold panel model on account of the panel data of 30 hi-tech industries in Mainland China during 2004–2016. The estimation results of the spatial autoregressive model revealed that China’s hi-tech industry innovation capability exerted significant spatial correlation and spatial spillover effects. However, the hi-tech industry innovation capability in the surrounding areas exerted a significant reverse spatial spillover effect on this area. Both R&D personnel flow and R&D capital flow have significantly promoted China’s hi-tech industry innovation capabilities in recent years. Government intervention exerted a significant opposite regulatory impact on the correlation between R&D factor flow and innovation capability of China’s hi-tech industries. Furthermore, the estimation results of the dynamic threshold panel model revealed that nonlinear impacts of R&D personnel flow and R&D capital flow on innovation ability of China’s hi-tech industries depended on the specific level of government intervention.