Productivity in China's high technology industry:regional heterogeneity and R&D

This paper analyzes the impact of Research and Development (R&D) on the productivity of China's high technology industry. In order to capture important differences in the effect of R&D on output that arise from geographic and socioeconomic differences across three major regions in China, we use a novel semiparametric approach that allows us to model heterogeneities across provinces and time. Using a unique provincial level panel dataset spanning the period 2000–2007, we find that the impact of R&D on output varies substantially in terms of magnitude and significance across different regions. Results show that the eastern region benefits the most from R&D investments, however it benefits the least from technical progress, while the western region benefits the least from R&D investments, but enjoys the highest benefits from technical progress. The central region benefits from R&D investments more than the western region and benefits from technical progress more than the eastern region. Our results suggest that R&D investments would significantly increase output in both the eastern and central regions, however technical progress in the central region may further compound the effects of R&D on output within the region.

Industrial districts, inward foreign investment and regional development

This article compares the importance of agglomerations of local firms, and inward FDI as drivers of regional development. The empirical analysis exploits a unique panel dataset of the Italian manufacturing sector at the regional and industry levels. We explore whether FDI and firm agglomeration can be drivers of total factor productivity (separately and jointly), with this effect being robust to different estimators, and different assumptions about inter-regional effects. In particular, we isolate one form of firm agglomeration that is especially relevant in the Italian context, industrial districts, in order to ascertain their impact on productivity. In so doing, we distinguish standard agglomeration and localization economies from industrial districts to understand what additional impact the latter has on standard agglomeration effects. Interaction effects between FDI spillovers and different types of agglomeration economies shed some light on the heterogeneity of regional development patterns as well as on the opportunity to fine tune policy measures to specific regional contexts.