Technological spillovers in space and firm productivity: Evidence from China’s electric apparatus industry

Ming He*, Yang Chen, Ron Schramm

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

Using a spatial econometric model this article studies the determinants and spatial spillovers of firm productivity in China’s electric apparatus industry over the period of 1999–2007. We apply Kelejian’s FE-2SLS procedure to a higher-order spatial autoregressive model and estimate the spatial dependence of firm-level TFP within and across regional borders. The model demonstrates positive and significant intra-regional technological spillovers among firms. It also provides direct evidence that technological spillovers attenuate rapidly in spatial distance. We find that firm productivity benefits from own R&D and export activities, employment density, market competition and public expenditure. Further analyses show that the strength of spillover effects is affected by a broad range of factors, including the surface area of the region, administration type, border effect, transport and ICT infrastructure, FDI intensity, the financial sector, the utility service sector, and human capital. Factors that facilitate long-distance economic connections in general make inter-regional spillovers stronger but intra-regional spillovers weaker.

Original languageEnglish
Pages (from-to)2522-2541
Number of pages20
JournalUrban Studies
Volume55
Issue number11
DOIs
Publication statusPublished - 1 Aug 2018

Keywords

  • TFP
  • agglomeration
  • economic development
  • public expenditure
  • spatial autoregressive model
  • spillover

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