Sources of productivity spillovers: panel data evidence from China

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper assesses sources of productivity spillovers in China's electric and electronic manufacturing industry using a rich panel data-set of 25,360 firms observed over the period [2004][2005][2006][2007]. This industry is characterized by its important reliance on technology. In particular, the paper focuses on the role of other firms' productivity as well as productivity shifters in affecting own firm-level total factor productivity. In addition, this paper examines the possible difference between spillovers from foreign-owned units and from units which participate at global markets through exporting in comparison to domestically-owned and non-exporting units. We find evidence of stronger spillovers from exporting firms than from non-exporting firms. This is true for foreign-owned as well as domestic exporters. The strength of the spillover effects differ across subsectors. Terms of use: Documents inJEL-Code: C230, C310, D240, L650.

Why Is There a Lack of Evidence on Knowledge Spillovers From Foreign Direct Investment?

“…Görg and Greenaway (, ) list five substantive reasons for the failure to find unambiguously positive effects in econometric work: MNCs may be effective at ensuring their technological advantages and other firm‐specific assets and advantages do not spill over to other enterprises – they may be able to prevent leakages to domestic firms and, therefore, little or no spillovers occur. The more sophisticated the foreign subsidiary's technology the more foreign investors are motivated to prevent or limit spillovers (Roording and de Vaal, ; Baltagi et al ., ; Perri and Andersson, ). Foreign firms may reduce the productivity of domestic firms through competition effects. Superior foreign firms may attract demand away from domestic firms, and productivity of domestic firms decreases (Caves, ; Aitken and Harrison, ; Görg and Strobl, ; Konings, ; Sgard, ). Positive spillovers may only affect a subset of firms and aggregate studies, therefore, underestimate the true significance of such effects.…”

“…MNCs may be effective at ensuring their technological advantages and other firm‐specific assets and advantages do not spill over to other enterprises – they may be able to prevent leakages to domestic firms and, therefore, little or no spillovers occur. The more sophisticated the foreign subsidiary's technology the more foreign investors are motivated to prevent or limit spillovers (Roording and de Vaal, ; Baltagi et al ., ; Perri and Andersson, ).…”

“…By contrast, Baltagi et al . () for China and Perri and Andersson () for foreign subsidiaries in the U.S. semiconductor industry claim that the more technology intensive sectors and the higher the value of a subsidiary's knowledge stock the higher the need will be to protect it and the less spillovers will occur. Existing empirical evidence does not provide a uniform view on the impact of foreign subsidiaries’ knowledge‐creating activities and technological intensity on spillovers.…”

A Spatial Analysis of the R&D-Productivity Nexus at Firm Level

“…While R&D spillovers are determined by the diffusion of knowledge generated by firms' innovation and research efforts, productivity spillovers could occur due to the transmission of knowledge and better practices of other efficient firms, that is to other linkage effects which are not related to R&D. For example, such spillovers could be brought about by worker mobility (Stoyanov and Zubanov 2012) or by competition pressure which spurs a more efficient use of technology and resources and stimulates the search for new and more efficient technologies (Blomstr€ om and Kokko 1998;Proenca, Fontoura, and Crespo 2006) or by the benefit to neighboring firms brought about by the improved performance of intermediate input suppliers as a consequence of multinational entry (Javorcik 2004). Productivity spillovers could depend on both the technological gap between leaders and followers, as this drives followers to catch-up with leaders' technology, and the absorptive capacity of the followers (Baltagi, Egger, and Kesina 2015). At the regional level, a number of studies have evaluated the effect of innovative efforts by taking productivity spillovers into account through the employment of spatial econometric techniques (e.g., Antonelli, Patrucco, and Quatraro 2011;Dettori, Marrocu, and Paci 2012;LeSage and Fischer 2009).…”

“…As regards firm-level analyses, Baltagi, Egger, andKesina (2016, 2015) recently investigated the role of spatial spillovers in the productivity of Chinese chemical firms over 2004-2006 and of China's electric and electronic manufacturing firms over -2007, respectively. Baltagi Egger, and Kesina (2016 controlled for contextual effects of observable variables as well as spatial dependence of the disturbances, while Baltagi, Egger, and Kesina (2015) analyzed the effect on TFP of spillovers from different firm types-foreign owned versus domestically owned and exporters versus nonexporters-taking spatial dependence into account in the error term. Moreover, Lamieri and Sangalli (2013) allowed for spatial dependence in both TFP and error terms across firms in the evaluation of the impact of patents on the TFP of Italian manufacturing firms in 2010.…”