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External technology dependence and manufacturing TFP: Evidence from China

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  • Zhang, Cheng
  • Yao, Yangyang
  • Zhou, Han

Abstract

It remains an open question whether the reduction of external technology dependence (ETD) on foreign countries can improve the total factor productivity (TFP) of China's manufacturing industry. This paper uses the data of China's manufacturing industry from 2000 to 2016, to study the impact of ETD on TFP. Empirical results show that a 1% decrease in ETD could induce a 1% increase in TFP. As the TFP gap between China and the frontier countries shrinks, the indigenous innovation gains increasing importance. One can find that the effect of ETD on TFP in technology-intensive industries is stronger than that of other industries. Moreover, this study finds that the influence of ETD on TFP shows a significant threshold effect. Further, this paper uses the ratio of patents granted to represent the innovation capacity, and verifies its moderating role in the effect of ETD on TFP.

Suggested Citation

  • Zhang, Cheng & Yao, Yangyang & Zhou, Han, 2023. "External technology dependence and manufacturing TFP: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:riibaf:v:64:y:2023:i:c:s0275531923000119
    DOI: 10.1016/j.ribaf.2023.101885
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    More about this item

    Keywords

    External technology dependence; Total factor productivity gap; Industry heterogeneity; Human capital; Innovation capacity;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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