The Spatial Spillover Effect in Hi-Tech Industries: Empirical Evidence from China

Abstract

With ever-increasing economic globalization and rapid advancement of science and technology, developing high-tech industries have become an important way for many countries to achieve sustainable and environmentally friendly economic development. In this article, we aim to empirically test the critical factors, which can influence the spatial spillover of a country's high-tech industries. Using data from the high-tech industries in China during the years of 2007-2016, we establish a space lag model and a space error model to examine the space fixed effect, the time fixed effect, and the space-time double mixed effect in spatial spillover in high-tech industries. We compare the results of these two spatial panel models with those from a general panel model and find that the spatial spillover effect within high-tech industries is rather significant. Moreover, we find that the spatial-time double mixed of the spatial lag model is the best fitting effect. Our empirical results also show that the research and development (R&D) investment and international trade can positively promote spatial spillover of high-tech industries among different regions. In terms of policy insights, our results imply that the government can establish a technology transfer platform to promote the spillover in high-tech industries. This can help achieve a sustainable and balanced development of high-tech industries.Sustainability 2020, 12, 1551 2 of 16 agglomeration effects in the high-tech enterprises. In this paper, we focus on the following important questions: what are the critical factors which can influence the spatial spillover of high-tech industries? How do these factors influence the spatial spillover? What are the potential reasons for the unbalanced regional development of high-tech industries? The answers to these questions are of great theoretical and practical significance because they can help improve the output of the high-tech industries and promote the sustainable and balanced development of regional economies for many countries. For example, China is a vast country with regions with unbalanced economic development. The high-tech industries are highly concentrated in only several developed regions like Guangdong Province. How do you achieve the spillover of high-tech industries to other underdeveloped regions? This question is important not only for China's economic development, but also for many countries in the world with unbalanced regional economic development.In this paper, we employ spatial panel models to study spatial spillover in high-tech industries. We adopt the spatial panel models because they can deal with the spatial dependence among regions. In contrast, traditional models such as Ordinary Least Squares (OLS) models ignore the spatial effect and lead to estimation errors. To be more specific, in this research, we employ the spatial lag model (SLM) and the spatial error model (SEM), which are two of the most widely used spatial panel models. The SEM focuses on the influence of the error of random interferenc...

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