The impact of foreign R&D on the innovation performance of China’s high-tech industry and its spatial spillover effect

Abstract

The inflow of foreign R&D has brought vigor and vitality to the development of the high-tech industry (HTI). Using the panel data of HTI in 23 provinces (autonomous provinces and municipalities) in China from 2007 to 2016, this paper firstly calculates the Moran index of HTI’s innovation performance (IP), and finds a spatial agglomeration effect. After rigorous testing, we determine the most suitable spatial metering model. Finally, the spatial effect is further decomposed into three kinds of effects: direct effect, indirect effect, and total effect. This paper studies the impact of foreign research and development (R&D) on IP of HTI and its spatial spillover effects. According to the research, foreign R&D has a significant role in promoting IP of HTI in China, and has specific spatial spillover effects. Significantly, foreign R&D has substantial positive spillover effects of space. When IP of HTI is measured by product innovation, there is no obvious space overflow. However, panel regression showed a significant positive effect. In terms of the influence on product IP of HTI, foreign R&D plays an almost equal role as local R&D. In terms of the impact on technological IP of HTI, foreign R&D input plays a positive role. It has a spatial spillover effect, the degree of impact is lower than that of domestic R&D input. Local governments should formulate relevant policies to encourage the fluidity of technical knowledge and overcome the sticky problem of foreign R&D technical knowledge, which is an essential aspect of absorbing foreign R&D technical knowledge in the future.