The Mechanism as to How High-Tech Products Import Affect Their Export: Evidence from a China's Panel

Abstract

To show how import of China's high-tech products promotes their export, this paper develops an inter-provincial panel data model. In the model, independent variable is export of China's high-tech products, and dependent variables involve import of China's high-tech products, cross term of import and R&D spending, cross term of import and human capital and corss term of import and intellectual property rights. Empirical results show that: (1) high-tech commodity imports itself can not promote the corresponding commodity exports, (2) only those high-tech commodity imports matched with R&D expenditure, human capital, and protection of intellectual property rights promote export of high-tech products. This also implies that for developing countries, the growth of import should be progressive. Finally, several policy recommendations are proposed to help the Chinese government to adjust the foreign trade strategy.