Knowledge capital and spillover on regional economic growth: Evidence from China

Though the determinants of regional economic growth in China have been widely discussed in previous studies, the effects of knowledge capital and spillover have been less systematically investigated. This paper assesses how and to what extent knowledge capital and technology spillover contribute to regional economic growth in China. Moreover, the absorptive ability played by human capital on acquiring advanced foreign technologies is also investigated in this study. Empirical results show that knowledge capital, both of R&D capital and technology imports contribute significantly, with similar impact, to regional economic growth. The analyses also suggest the existence of R&D spillovers as well as international knowledge spillovers. Moreover, a region's absorptive ability is considered as the critical capability to absorb external knowledge sources embodied in FDI and imports, which then contribute to the regional economic growth.