Pop-up English-Chinese

Influence of internet on innovation of China’s manufacturing importers

TONG Jiadong1 YANG Jun1

(1.School of Economics, Nankai University)

【Abstract】Using the data of China’s manufacturing importers, this paper examined the micro-impact as well as the mechanisms of Internet on innovation. The study found that the Internet has significantly improved the level of innovation in China’s manufacturing importers. And the effect is more prominent in large-scale, high-efficiency, private, exporting, capital- and technology-intensive eastern firms. Further, the Internet mainly promotes firms’ innovation by improving the quality of imported products, and neither the effects of the types of imported product nor the effects of imported scale are obvious. Finally, while promoting the independent innovation of manufacturing importers, the Internet has also significantly improved the level of collaborative innovation. This paper has certain practical significance for improvement of the competitiveness and the quality of China’s manufacturing industry in the era of digital economy.

【Keywords】 Internet; manufacturing importers; innovation; propensity score matching;


【Funds】 The National Social Science Fund of China (12&ZD087) Major Project of Key Research Bases for Humanities and Social Sciences under the Ministry of Education (17JJD790013)

Download this article


    [1]. ① The core field for the identification of websites: “www” “com” “cn” “net” “http” “con” and “//”; and the core field for the identification of emails: “@.” [^Back]

    [2]. ① We delete any enterprise sample with missing values, zero values or negative values in total industrial output, enterprise sales, fixed assets, net value of fixed assets and annual average number of employees; the samples of enterprises with missing or negative values in any one of the wages payable, welfare payable, industrial value added and intermediate product input in 2004-2007; the samples of enterprises with less than eight employees; the samples of enterprises with missing operating profit; the samples of enterprises established before 1949, and the samples of enterprises whose age are less than 0. In addition, according to the practice of Freenstra et al.(2014),[39] in order to comply with the general accounting standards, this paper processes the following data: excluding the enterprises with current assets exceeding fixed assets and those with total fixed assets exceeding total assets; excluding the enterprises whose export delivery value is greater than sales revenue and the enterprises whose depreciation of this year is greater than the accumulated depreciation. [^Back]

    [3]. ① Due to space limitation, complete regression results are available upon request. [^Back]

    [4]. ① The database includes the patent applications and authorization of listed companies, non-listed companies and different regions in China. It not only considers the number and types of patents applied or authorized by different entities, but also includes the independent application, patent acquisition, joint application and patent acquisition with other entities. We match the enterprise name index in the database with the enterprise name in this sample, and take the logarithm of the patent data. [^Back]

    [5]. ② It is worth noting that after matching, the sample size of this paper is greatly reduced, so in this part, the proportion of PSM nearest neighbor matching is expanded, and the original 1:5 matching proportion is relaxed to 1:7. In addition, we further expand the matching ratio to 1:8, 1:9 and 1:10, and the regression results do not change significantly, which shows that the regression results have certain robustness. [^Back]


    [1] GROSSMAN G M, HELPMAN E. Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press, 1991.

    [2] AUTOR D, DORN D, HANSON G H, PISANO G, SHU P. Foreign Competition and Domestic Innovation: Evidence from US Patents. NBER Working Paper, 2016, No. 22879.

    [3] FENG L, LI Z, SWENSON D L. The Connection between Imported Intermediate Inputs and Exports: Evidence from Chinese Firms. Journal of International Economics, 2016, 101(7): 86–101.

    [4] Guo, J. & Luo, P. Management World (管理世界), (10) (2016).

    [5] DUNNEWIJK T, HULTEN S. A Brief History of Mobile Communication in Europe. Telematics and Informatics, 2007, 24(3): 164–179.

    [6] ROMER P M. Endogenous Technological Change. Journal of Political Economy, 1990, 98(5): 71–102.

    [7] COE D T, HELPMAN E, HOFFMAISTER A W. North-South R&D Spillovers. The Economic Journal, 1997, 107(440): 134–149.

    [8] Gao, L. & Wang, L. China Economic Quarterly (经济学) (季刊), (2) (2010).

    [9] CONNOLLY M P. The Dual Nature of Trade Measuring Its Impact on Imitation and Growth. Journal of Development Economics, 2003, 72(1): 31–55.

    [10] Yu, M. Economic Research Journal (经济研究), (3) (2015).

    [11] Zhang, J., Zheng, W. & Chen, Z. China Economic Quarterly (经济学) (季刊), (3) (2015).

    [12] YOUNG A. Learning by Doing and the Dynamics Effects of International Trade. Quarterly Journal of Economics, 1991, 106(2): 369–405.

    [13] BAUMOL W, LEE K. Contestable Markets, Trade and Development. World Bank Research Observer, 2001, 6(1): 1–17.

    [14] HOLMES J, SCHMITZ J. Competition and Productivity: A Review of Evidence. Annual Review of Economics, 2010, 2(1), 619–642.

    [15] Jian, Z., Zhang, T. & Fu, Y. Economic Research Journal (经济研究), (8) (2014).

    [16] AMITI M, KONINGS J. Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia. The American Economic Review, 2007, 97(5): 1611–1638.

    [17] GOLDBERG P, KHANDELWAL A, PAVCNIK N, TOPALOVA P. Imported Intermediate Inputs and Domestic Product Growth: Evidence from India. The Quarterly Journal of Economics, 2010, 125(4): 1727–1767.

    [18] BIESEBROECK V J. Revisiting Some Productivity Debates. NBER Working Paper, 2003, No. 10065.

    [19] MUENDLER M A. Trade, Technology, and Productivity: A Study of Brazilian Manufacturers, 1986–1998. CESifo Working Paper, 2004, No. 1148.

    [20] Zhang, Y., Chen, W. & Luo, S. The Journal of World Economy (世界经济), (9) (2015).

    [21] Wei, H. & Wu, J. Journal of Financial Research (金融研究), (9) (2018).

    [22] GEREFFI G, HUMPHREY J, STUGEON T. The Governance of Global Value Chains. Review of International Political Economy, 2005, 12(1): 78–104.

    [23] LIU Q, QIU L D. Intermediate Input Imports and Innovations: Evidence from Chinese Firms’ Patent Filings. Journal of International Economics, 2016, 103(11): 166–183.

    [24] SANTACREU M A. Innovation, Diffusion, and Trade: Theory and Measurement. Journal of Monetary Economics, 2015, 75: 1–20.

    [25] LIU R, ROSELL C. Import Competition, Multi-product Firms, and Basic Innovation. Journal of International Economics, 2013, 91(2): 220–234.

    [26] FREUND C, WEINHOLD D. The Internet and International Trade in Services. American Economic Review, 2002, 92(2): 2433–2434.

    [27] FREUND C, WEINHOLD D. On the Effect of the Internet on International Trade. Journal of International Economics, 2004, 62(1): 171–189.

    [28] CLARKE G R, WALLSTEN S J. Has the Internet Increased Trade? Evidence, from Industrial and Developing Countries. Economic Inquiry, 2010, 44(3): 465–484.

    [29] YADAV N. The Role of Internet Use on International Trade: Evidence from Asian and Sub-Saharan African Enterprises. Global Economy Journal, 2014, 14(2): 189–214.

    [30] Li, K., Shao, W. & Wang, Y. Management World (管理世界), (4) (2015).

    [31] Shi, B. Economic Research Journal (经济研究), (5) (2016).

    [32] Li, B. & Li, R. The Journal of World Economy (世界经济), (7) (2017).

    [33] Yue, Y. & Li, B. China Industrial Economics (中国工业经济), (8) (2018).

    [34] FERRO E. Signaling and Technological Marketing Tools for Exporters. Social Science Electronic Publishing, 2011.

    [35] Liu, G., Chen, D. & Feng, C. China Industrial Economics (中国工业经济), (7) (2017).

    [36] YU M J. Processing Trade, Tariff Reductions and Firm Productivity: Evidence from Chinese Firms. Economic Journal, 2015, 125(585): 943–988.

    [37] UPWARD R, WANG Z, ZHENG J H. Weighing China’s Export Basket: The Domestic Content and Technology Intensity of Chinese Exports. Journal of Comparative Economics, 2013, 41(2): 527–543.

    [38] BRANDT L, VAN BIESEBROECK J, ZHANG Y. Creative Accounting or Creative Destruction? Firm-level Productivity Growth in Chinese Manufacturing. Journal of Development Economic, 2012, 97(2): 339–351.

    [39] FEENSTRA R C, Li Z, Yu, M. Exports and Credit Constraints Under Incomplete Information: Theory and Evidence From China. The Review of Economics and Statistics, 2014, 96(4): 729–744.

    [40] ROSENBAUM P, RUBIN D. Constructing A Control Group Using Multivariate Matched Sampling Methods That Incorporate the Propensity Score. American Statistician, 1985, 39(1): 33–38.

    [41] WRIGHT G C JR. Linear Models for Evaluating Conditional Relationships. American Journal of Political Science, 1976, 20(2): 349–373.

    [42] ANDERSON J E, WINCOOP E V. Trade Costs. Journal of Economic Literature, 2004, 42(3): 691–751.

    [43] Yu, M. China Economic Quarterly (经济学) (季刊), (4) (2011).

    [44] Dai, X. & Jin, P. Economic Research Journal (经济研究), (7) (2014).

    [45] SCHOTT P. Across-Product versus Within-Product Specialization in International Trade. Quarterly Journal of Economics, 2004, 119(2): 647–678.

    [46] HUMMELS D, KLENOW P. The Variety and Quality of a Nation’s Exports. American Economic Review, 2005, 95(3), 704–723.

    [47] BAS M, STRAUSS-KAHN V. Does Importing More Inputs Raise Exports? Firm Level Evidence from France. Review of World Economics, 2014, 150(2): 241–275.

    [48] WU J, ZHOU Z X, LIANG L. Measuring the Performance of Chinese Regional Innovation Systems with Two-Stage DEA-Based Model. International Journal of Sustainable Society, 2010, 2(1): 85–99.

    [49] CHEN K H, GUAN J C. Measuring the Efficiency of China’s Regional Innovation Systems: An Application of Network DEA. Regional Studies, 2012, 46(3): 355–377.

    [50] Bai, J. & Jiang, F. Economic Research Journal (经济研究), (7) (2015).

This Article


CN: 11-1692/F

Vol , No. 11, Pages 1-15

November 2019


Article Outline


  • Introduction
  • 1 Literature review
  • 2 Research method, model and data
  • 3 Baseline estimation results and analysis
  • 4 Test for heterogeneity
  • 5 Effect of the import quality, types and scale
  • 6 The Internet and collaborative Innovation of enterprises
  • 7 Conclusion
  • Footnote