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International Technology Transfer and Domestic Innovation: Evidence from the High-Speed Rail Sector in China

Yatang Lin, Yu Qin () and Zhuan Zie

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: How does the transfer of advanced technology spur innovation in developing countries? This paper exploits the large-scale introduction of high-speed railway (HSR) technology into China in 2004 as a natural experiment to address this question. The experiment is unique in the sense that this wave of technology transfer is large, abrupt and arguably exogenous in timing, covering a variety of technology classes and a large number of geographically-dispersed railway-related firms. With detailed information on the types of technology transferred and the identities of the receiving firms, as well as their product market specializations, we are able to depict a clear picture of how foreign technology is digested and spurs follow-up innovation in and out of directly receiving firms. Our findings suggest that technology transfer leads to significant growth in HSR-related patents in cities with direct receivers of imported technology after 2004 in a triple-difference estimation. We also observe sizable spillovers to firms that are not directly related to the railway industry. Technology similarity plays an important role in technology diffusion, but we do not observe any significant impacts of geographic proximity. Previous university research strength in relevant fields is also conducive to stronger technology spillovers.

Keywords: innovation; foreign technology transfer; knowledge spillover; China (search for similar items in EconPapers)
JEL-codes: O25 O33 O38 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-cna, nep-cse, nep-ino, nep-tid, nep-tra and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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Working Paper: International technology transfer and domesticinnovation: evidence from the high-speed rail sector inChina (2015) Downloads
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