Innovation and Spillovers in China: Spatial Econometric Approach

Seoul Journal of Economics 27 (No. 2 2014): 149-170

22 Pages Posted: 15 Jul 2014

See all articles by Sungho Rho

Sungho Rho

Sejong University

Ik Joon Moon

Korea Institute for International Economic Policy

Date Written: May 30, 2014

Abstract

This paper examines spatial dependence in China’s regional innovation using the spatial econometric approach. Dataset covers 30 Chinese provinces for the period from 2000 to 2009. The main findings are as follows: First, an interdependent and simultaneous influential relation in regional innovation is observed in most of the spatial panel models. Second, R&D activity significantly affects regional innovation. The effect of entrepreneurial activity on innovation is generally lower than that of R&D. In addition, the indirect spillover effect of R&D activity and entrepreneurial activity among adjacent provinces is limited. Third, the spillover effect of R&D and entrepreneurial activity among provinces diminishes with distance based on the regression analysis that formulated spatial weight matrixes for three different range segments. That is, the spillover effect of entrepreneurial activity is limited by spatial proximity, and the spillover effect of R&D activity is attenuated by the increase in distance.

Keywords: Innovation, R&D activity, Entrepreneurial activity

JEL Classification: O03, P02

Suggested Citation

Rho, Sungho and Moon, Ik Joon, Innovation and Spillovers in China: Spatial Econometric Approach (May 30, 2014). Seoul Journal of Economics 27 (No. 2 2014): 149-170, Available at SSRN: https://ssrn.com/abstract=2466256

Sungho Rho (Contact Author)

Sejong University ( email )

143-743 Seoul
Korea, Republic of (South Korea)

Ik Joon Moon

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

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