Change in factor endowment, technological innovation and export: evidence from China’s manufacturing sector
European Journal of Innovation Management
ISSN: 1460-1060
Article publication date: 15 July 2021
Issue publication date: 2 January 2023
Abstract
Purpose
While previous studies find innovation to be an essential driver of export growth, the existing literature has neglected the role of different dimensions of technological innovation in export performance, especially in emerging countries. In particular, much less attention has been provided to investigate how enhancing innovation activities in more technical industries influence the relationship between technological innovation and export. Purpose of this paper is to present a unified framework to empirically investigate the integrated impact of the various technological innovation dimensions on export performance of industrial enterprises in China.
Design/methodology/approach
Using a panel dataset of enterprise-level data classified into China’s two-digit capital- and technology-intensive manufacturing industries for the 1998–2016 period and applying system-GMM regressions to control for the problem of endogeneity, the authors empirically investigate the integrated impact of a variety of the dimensions of technological innovation on export.
Findings
The authors find that: (1) Domestic R&D efforts and technology spillovers from foreign investment are critical determinants for capital- and technology-intensive exports. (2) External technology may not automatically contribute to export success whereas the interaction of external technology with domestic skill and expertise is a necessary condition for global competitiveness. (3) There exists complementarity between domestic and foreign innovation efforts when they jointly determine export. (4) Chinese government’s trade and innovation policies have significantly contributed to its export growth. Also, the authors examine that the extent of the effect of innovation on export depends upon the type of industry and it is found to be greater in capital- and technology-intensive industries.
Originality/value
This paper fills the research gap in existing literature by distinguishing between different dimensions of technological innovation and integrating them into a unified framework to empirically investigate their impact on export performance of industrial enterprises in emerging countries. The study provides important insights for policymakers.
Keywords
Acknowledgements
Funding: The authors greatly acknowledge financial support from Ministry of Education, P.R. China for the major research project “A Study on the Transformation of China’s Outward Pattern of Economic Development (13JJD790021)”.
Conflicts of interest: We declare that there is no conflict of interest.
The authors sincerely appreciate the efforts of the editorial team and comments from two anonymous referees. The authors also thank valuable comments and suggestions from the participants of The Fourth Biennial Conference of China Development Studies (2019) held at Shanghai Jiaotong University, the participants of 2nd international workshop on “Artificial Intelligence and Big Data Analysis” (2018) held at Macau and the participants of inaugural forum on “New-era Development Economics” (2018) held at Centre for Economic Development Research (CEDR) Wuhan University.
Citation
Rauf, A., Ma, Y. and Jalil, A. (2023), "Change in factor endowment, technological innovation and export: evidence from China’s manufacturing sector", European Journal of Innovation Management, Vol. 26 No. 1, pp. 134-156. https://doi.org/10.1108/EJIM-01-2021-0055
Publisher
:Emerald Publishing Limited
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