IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i19p10797-d645566.html
   My bibliography  Save this article

Threshold Effect of the Internet on Regional Innovation in China

Author

Listed:
  • Congbo Chen

    (School of Economics & Management, Fuzhou University, Fuzhou 350108, China)

  • Azhong Ye

    (School of Economics & Management, Fuzhou University, Fuzhou 350108, China)

Abstract

Internet business adoption is an essential determinant of regional innovation which has received little attention in the literature. This paper emphasizes the role and threshold effect of Internet business adoption in increasing regional innovation outputs. We construct a threshold spatial autoregressive model to illustrate the nonlinear positive impact of Internet business adoption on innovation, simultaneously estimating interregional knowledge spillovers. To test threshold effect and interregional knowledge spillover, we use province-level panel data set in China and calculate Moran’s I and LR-like statistics to confirm the nonlinearity and spatial dependence. Within the empirical model, we find a positive relationship between the number of websites owned by local firms and the number of patents filed in that specific region. Our analysis suggests that Internet business adoption has a greater marginal benefit on the innovation of isolate regions. The results also indicate that ignoring interregional knowledge spillover may cause mistakes in the model on regional innovation systems. Policy implications for these results suggest that the government should not only pay attention to Internet development of the whole country but also encourage the reduction of digital divisions among regions

Suggested Citation

  • Congbo Chen & Azhong Ye, 2021. "Threshold Effect of the Internet on Regional Innovation in China," Sustainability, MDPI, vol. 13(19), pages 1-13, September.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:19:p:10797-:d:645566
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/19/10797/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/13/19/10797/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rosina Moreno & Raffaele Paci & Stefano Usai, 2005. "Spatial Spillovers and Innovation Activity in European Regions," Environment and Planning A, , vol. 37(10), pages 1793-1812, October.
    2. Forman, Chris & van Zeebroeck, Nicolas, 2019. "Digital technology adoption and knowledge flows within firms: Can the Internet overcome geographic and technological distance?," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    3. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    4. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
    5. Margarita Billon & Fernando Lera-Lopez & Rocío Marco, 2017. "Patterns of Combined ICT Use and Innovation in the European Regions," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 20(1), pages 28-42, January.
    6. Tanya S. Rosenblat & Markus M. Mobius, 2004. "Getting Closer or Drifting Apart?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 971-1009.
    7. Paunov, Caroline & Rollo, Valentina, 2016. "Has the Internet Fostered Inclusive Innovation in the Developing World?," World Development, Elsevier, vol. 78(C), pages 587-609.
    8. Xu Xu & Alison Watts & Markum Reed, 2019. "Does access to internet promote innovation? A look at the U.S. broadband industry," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1423-1440, December.
    9. Luc Anselin & Attila Varga & Zoltan Acs, 2008. "Local Geographic Spillovers Between University Research and High Technology Innovations," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 9, pages 95-121, Edward Elgar Publishing.
    10. Kumar, Ronald Ravinesh & Stauvermann, Peter Josef & Samitas, Aristeidis, 2016. "The effects of ICT⁎ on output per worker: A study of the Chinese economy," Telecommunications Policy, Elsevier, vol. 40(2), pages 102-115.
    11. Xu, Jingjing & Zhang, Yan, 2018. "Family CEO and information disclosure: Evidence from China," Finance Research Letters, Elsevier, vol. 26(C), pages 169-176.
    12. Eckhardt Bode, 2004. "The spatial pattern of localized R&D spillovers: an empirical investigation for Germany," Journal of Economic Geography, Oxford University Press, vol. 4(1), pages 43-64, January.
    13. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
    14. Gao, Xia & Guo, Xiaochuan & Sylvan, Katz J. & Guan, Jiancheng, 2010. "The Chinese innovation system during economic transition: A scale-independent view," Journal of Informetrics, Elsevier, vol. 4(4), pages 618-628.
    15. James P. LeSage & R. Kelley Pace, 2008. "Spatial Econometric Modeling Of Origin‐Destination Flows," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 941-967, December.
    16. Marshall Van Alstyne & Erik Brynjolfsson, 2005. "Global Village or Cyber-Balkans? Modeling and Measuring the Integration of Electronic Communities," Management Science, INFORMS, vol. 51(6), pages 851-868, June.
    17. Sorenson, Olav & Fleming, Lee, 2004. "Science and the diffusion of knowledge," Research Policy, Elsevier, vol. 33(10), pages 1615-1634, December.
    18. Andrea Caragliu & Peter Nijkamp, 2016. "Space and knowledge spillovers in European regions: the impact of different forms of proximity on spatial knowledge diffusion," Journal of Economic Geography, Oxford University Press, vol. 16(3), pages 749-774.
    19. Jarle Moss Hildrum, 2009. "Sharing Tacit Knowledge Online: A Case Study of e-Learning in Cisco's Network of System Integrator Partner Firms," Industry and Innovation, Taylor & Francis Journals, vol. 16(2), pages 197-218.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cabrer-Borras, Bernardi & Serrano-Domingo, Guadalupe, 2007. "Innovation and R&D spillover effects in Spanish regions: A spatial approach," Research Policy, Elsevier, vol. 36(9), pages 1357-1371, November.
    2. Elvira Cerver-Romero & João J. Ferreira & Cristina Fernandes, 2020. "A scientometric analysis of knowledge spillover research," The Journal of Technology Transfer, Springer, vol. 45(3), pages 780-805, June.
    3. Lorena M. D'Agostino & Grazia D. Santangelo, 2012. "The Global Fragmentation of R&D Activities: The Home Region Perspective," DRUID Working Papers 12-06, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Rosina Moreno & Raffaele Paci & Stefano Usai, 2006. "Innovation Clusters in the European Regions," European Planning Studies, Taylor & Francis Journals, vol. 14(9), pages 1235-1263, May.
    5. Filippopoulos, Nikolaos & Fotopoulos, Georgios, 2022. "Innovation in economically developed and lagging European regions: A configurational analysis," Research Policy, Elsevier, vol. 51(2).
    6. Balland, Pierre-Alexandre & Boschma, Ron, 2022. "Do scientific capabilities in specific domains matter for technological diversification in European regions?," Research Policy, Elsevier, vol. 51(10).
    7. Marta Aloi & Joanna Poyago-Theotoky & Frédéric Tournemaine, 2022. "The Geography of Knowledge and R&D-led Growth [Real effects ofacademic research: comment]," Journal of Economic Geography, Oxford University Press, vol. 22(6), pages 1149-1190.
    8. Rosina Moreno & Ernest Miguélez, 2012. "A Relational Approach To The Geography Of Innovation: A Typology Of Regions," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 492-516, July.
    9. Ernest Miguélez & Rosina Moreno, 2013. "Do Labour Mobility and Technological Collaborations Foster Geographical Knowledge Diffusion? The Case of European Regions," Growth and Change, Wiley Blackwell, vol. 44(2), pages 321-354, June.
    10. Alexandru FOTIA & Cezar TECLEAN, 2019. "The Innovation Efficiency In Central And Eastern Europe – An Input-Output Comparative Analysis Between Czech Republic, Hungary, Poland And Romania," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6, pages 269-287.
    11. Marta Foddi & Raffaele Paci & Alessandra Colombelli, 2011. "The knowledge regions in the enlarged Europe," ERSA conference papers ersa11p1140, European Regional Science Association.
    12. Shang, Qingyan & Poon, Jessie P.H. & Yue, Qingtang, 2012. "The role of regional knowledge spillovers on China's innovation," China Economic Review, Elsevier, vol. 23(4), pages 1164-1175.
    13. Andrés Rodríguez-Pose & Edna M. Villarreal Peralta, 2015. "Innovation and Regional Growth in Mexico: 2000–2010," Growth and Change, Wiley Blackwell, vol. 46(2), pages 172-195, June.
    14. Riccardo Crescenzi & Andrés Rodríguez-Pose, 2012. "An ‘Integrated’ Framework For The Comparative Analysis Of The Territorial Innovation Dynamics Of Developed And Emerging Countries," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 517-533, July.
    15. Cristian Barra & Nazzareno Ruggiero, 2022. "How do dimensions of institutional quality improve Italian regional innovation system efficiency? The Knowledge production function using SFA," Journal of Evolutionary Economics, Springer, vol. 32(2), pages 591-642, April.
    16. Ernest Miguélez & Rosina Moreno, 2013. "“Mobility, networks and innovation: The role of regions’ absorptive capacity”," IREA Working Papers 201316, University of Barcelona, Research Institute of Applied Economics, revised Oct 2013.
    17. Paola Cardamone, 2018. "Firm innovation and spillovers in Italy: Does geographical proximity matter?," Letters in Spatial and Resource Sciences, Springer, vol. 11(1), pages 1-16, March.
    18. Nosvelli, Mario & Maggioni, Mario A. & Uberti, Teodora Erika, 2006. "Space Vs. Networks in the Geography of Innovation: A European Analysis," Knowledge, Technology, Human Capital Working Papers 12078, Fondazione Eni Enrico Mattei (FEEM).
    19. Andrea Bonaccorsi & Daniele Biancardi & Mabel Sanchez Barrioluengo & Federico Biagi, 2019. "Study on Higher Education Institutions and Local Development," JRC Research Reports JRC117272, Joint Research Centre.
    20. Sleuwaegen, Leo & Boiardi, Priscilla, 2014. "Creativity and regional innovation: Evidence from EU regions," Research Policy, Elsevier, vol. 43(9), pages 1508-1522.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:19:p:10797-:d:645566. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.