Title: Do KIBS facilitate innovation in manufacturing firms in China? Evidence on production-based linkages

Authors: Ting Zhao; Guanxu Wan; Meng Yang; Yunlong Duan

Addresses: School of Economics, Zhejiang Gongshang University, 18 Xuezheng Street, Hangzhou 310018, China ' School of Urban and Regional Science, Shanghai University of Finance and Economics, 777 Guoding Road, Shanghai 200433, China ' Business School, Yunnan University of Finance and Economics, 237 Longquan Road, Kunming 650221, China ' International Business School, Yunnan University of Finance and Economics, 237 Longquan Road, Kunming 650221, China

Abstract: Drawing on knowledge-based theory and spatial production network, this paper explores how local protectionism in China influences the effect of spatial knowledge spillover from knowledge-intensive business services (KIBS) on manufacturing clients' innovation performance. Using a large panel data set covering 283 Chinese prefecture cities and municipalities from 2003 to 2013, we applied input-output analysis to quantify the spatial knowledge spillover based on production linkages. The empirical results verify a prominent 'border effect' of the spatial knowledge spillover from KIBS in China, which is significantly positive within a limited distance of no more than 250 kilometers. Notably, the spatial knowledge spillover is positively correlated with manufacturing firms' scale, and cross-region KIBS more significantly improves the innovation performance of their manufacturing clients than local KIBS. This paper contributes to a comprehensive understanding of the relationship between KIBS and manufacturing firms in China's specific institutional context.

Keywords: knowledge-intensive business services; KIBSs; spatial knowledge spillover; local protectionism; geographic proximity; innovation.

DOI: 10.1504/IJTM.2021.120927

International Journal of Technology Management, 2021 Vol.87 No.2/3/4, pp.339 - 383

Accepted: 08 Aug 2021
Published online: 17 Feb 2022 *

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