Value-Added Trade, Trade Barriers, and International Technology Spillover—Evidence from China’s Manufacturing Industry

Abstract

Abstract Whereas the technology spillover effect of international trade has been widely concerned by academic circles, the impact of trade barriers on technology spillover has received relatively less attention. This paper assesses the heterogeneity of international technology spillover effects in China’s manufacturing industry from traditional gross trade and value-added trade perspectives. Moreover, a deep insight into the effects of tariff and non-tariff barriers on international technology diffusion from traditional gross trade and value-added trade perspectives is also provided. Results show that the international trade indeed engenders technology diffusion, which is especially true in value-added trade characterized by intermediate goods trade compared with traditional gross trade. Additionally, tariff barriers severely disrupt technology diffusion in international trade, and traditional gross trade statistics underestimate the cumulative destructive effect of trade barriers on technology diffusion. Consequently, it can be concluded that reducing the abuse and misuse of non-tariff barriers can moderate the negative effect of trade barriers on international technology diffusion. JEL classification numbers: F14. Keywords: Global value chains; Value-added trade; Trade barriers; International technology spillover; Manufacturing industry.