Technology imports, product exports and firms’ R&D investment: an empirical analysis of firms in the Chinese high technology sector

Abstract

New trade theory emphasises the important role that international trade plays in advancing technologies. This study examines the impact of international trade on firm research and development investment (RDI). Specifically, it analyses the impact of technology imports and product exports respectively on firm RDI in the high technology sector of China. The hypotheses are tested against 1111 firms in the high technology sector in Zhejiang province. Neither technology imports nor product exports have a positive impact on firm RDI at an aggregated level. However, disembodied technology imports have a significant positive impact on firm RDI, while non-high technology product exports show a significant negative impact.