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China's Sustained Economic Growth: Do Direct R&D Spillovers Matter?
Author(s) -
Jiang Renai,
Cai Hong,
Li Yali,
Li Hong
Publication year - 2010
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2010.01211.x
Subject(s) - china , spillover effect , subsidy , knowledge spillover , human capital , international economics , business , economics , absorptive capacity , monetary economics , international trade , industrial organization , market economy , microeconomics , political science , law
Abstract Using data from 1986–2005, the present paper estimates the impact of direct knowledge spilled over from G‐7 countries on China's economy. We use telephone line penetration rates and personnel flows to estimate the direct spillover effect. Our results show that direct knowledge spillovers through telecommunication networks and personnel flows are important components of international R&D spillovers in China. These direct channels of spillover effectively accelerate China's economic growth. Therefore, China should invest more in human capital and in its telecommunication network to enhance the absorptive capacity of direct R&D spillovers, and to increase communication with other nations, in particular the USA and Japan. More subsidies to domestic R&D research and purchase of intermediate goods will help to raise China's R&D intensity.