Do Imports of Technology Facilitate Technological Progress? Evidence from China

AbstractThis paper empirically investigates the impact of imports of technology on total factor productivity for a cross sectional sample of large and medium-sized industrial enterprises by 30 major provinces or regions in China. The possible determinants of total factor productivity are sought with special focus on imports of technology. An endogeneity test is performed in order to examine whether inconsistent results exist or not. Empirical results indicate that imports of technology, the level of R&D and human capital are the most significant factors enhancing total factor productivity in Chinese industries. The findings in this paper support the argument that accelerating imports of technology is an effective way of facilitating technology progress in China