The Influence of Quality and Variety of New Imports on Enterprise Innovation: Evidence from China

Guifu Chen, Shan Zhan and Shigeyuki Hamori
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Guifu Chen: Center for Macroeconomic Research, The School of Economics, Xiamen University, Xiamen 361005, China
Shan Zhan: Center for Macroeconomic Research, The School of Economics, Xiamen University, Xiamen 361005, China

Sustainability, 2020, vol. 12, issue 22, 1-20

Abstract: In this study, we introduce the concept of differentiated quality inputs with knowledge-driven specifications for research and development (R&D) under an open economy to the endogenous growth model of knowledge spillover. Using matching industry enterprise and customs data from 2001 to 2007, which is representative of micro data at the Chinese industry level, we theoretically analyze the influence of the quality and variety of imported products on Chinese enterprises’ innovation and economic growth. We find that, first, the improvement of the quality and variety of new imported products can promote enterprise innovation. Second, new imported intermediate inputs and capital goods, new imported high-technology products, and products imported from Organization for Economic Co-operation and Development (OECD) countries have stronger promoting effects on enterprise innovation. We conclude that imported products stimulate the growth of the economy through two channels: expanding the variety and increasing the quality of inputs. To verify the stability of our model, we conducted robustness tests by defining new imported products based on a base year, measuring enterprise innovation by the number of patent applications, and measuring the quality of new imported products in a new way.

Keywords: new imported products; quality; variety; enterprise innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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