Firm Performance and Knowledge Spillovers from Academic, Industrial and Foreign Linkages: The Case of China
University of Texas at Arlington - Department of Economics; Emory University - Department of Economics
Catherine J. Morrison Paul
University of California, Davis - Department of Agricultural and Resource Economics; National Bureau of Economic Research (NBER); University of Hartford - Barney School of Business
November 25, 2011
Journal of Productivity Analysis, Forthcoming
Firm performance may be enhanced by linkages with academic institutions, other firms, and foreign markets that confer knowledge spillovers as well as internal R&D that creates firm-specific knowledge. In particular, firm productivity and innovation may be enhanced by positive externalities from knowledge and technology produced by universities and research institutions (URIs) and diffused to the domestic economy. Productive contributions from such linkages might be particularly expected in China, where policy measures have explicitly supported and facilitated connections between URIs and firms to stimulate economic development and competitiveness. In this paper, we measure the performance impact of such knowledge spillovers in Chinese firms by using a variety of specifications, estimators, and robustness checks, including an “IV” specification that controls for endogeneity. We find more patent activity in Chinese firms with URI connections and enhanced firm productivity particularly from linkages with research institutions (RIs). Introduction of new products, processes, and new businesses is also positively associated with linkages with research institutions, as well as with linkages with other firms.
Keywords: China, Knowledge Spillovers, Economic Performance, Research Institutions, University, Firm, and Foreign Linkages
JEL Classification: C26, D24, L60, O30, O53Accepted Paper Series
Date posted: November 26, 2011
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