Abstract
In this study, we introduce the concept of differentiated quality inputs with knowledge-driven specifications for research and development (R&D) under an open economy to the endogenous growth model of knowledge spillover. Using matching industry enterprise and customs data from 2001 to 2007, which is representative of micro data at the Chinese industry level, we theoretically analyze the influence of the quality and variety of imported products on Chinese enterprises’ innovation and economic growth. We find that, first, the improvement of the quality and variety of new imported products can promote enterprise innovation. Second, new imported intermediate inputs and capital goods, new imported high-technology products, and products imported from Organization for Economic Co-operation and Development (OECD) countries have stronger promoting effects on enterprise innovation. We conclude that imported products stimulate the growth of the economy through two channels: expanding the variety and increasing the quality of inputs. To verify the stability of our model, we conducted robustness tests by defining new imported products based on a base year, measuring enterprise innovation by the number of patent applications, and measuring the quality of new imported products in a new way.
Highlights
With the continuous improvement of the global value chain system and the increasing volume of world economy and trade, studying the impact of the trade on global economic development has become a point of interest in the field of international economics and trade
Enterprise innovation involves organizational innovation, technological innovation, management innovation, strategic innovation, and other issues. It is expressed by the proportion of new products and the number of patent applications in Section 5.4.) The explanatory variable QN represents the quality of new imports, VSN represents the variety of new imports, uj, uk, and ut represent industry, province, and year fixed effects, respectively; εijkt is a random disturbance term; and X represents the vector of the control variables. (When we added the square term of the variable QN and VSN to the regression model, coefficients of these variables were not statistically significant, so we chose the linear model.)
We analyze the impact of the quality and variety of new imported products on enterprise innovation
Summary
With the continuous improvement of the global value chain system and the increasing volume of world economy and trade, studying the impact of the trade on global economic development has become a point of interest in the field of international economics and trade. This study contributes to the above literature on three grounds It introduces the concept of imported product quality and variety into the endogenous growth model of knowledge spillover in the open economy, and theoretically analyzes the influence of these factors on innovation and economic growth. It analyzes the influence of the quality and variety of new imported products on enterprise innovation using a representative of micro data at the Chinese industry level.
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