Inter-industry Technology Spillover Effects in China： Evidence from 35 Industrial Sectors

The present paper calculates 35 industrial sectors' similarity matrices for the period of 1997–2008 using China's input–output tables for 1997, 2002 and 2007, and uses these to measure inter‐industry technology spillover to analyze the spillover effects on industrial sectors' labor productivity. The empirical analysis shows that inter‐industry technology spillover has a significant positive effect on the labor productivity of each industry. The elasticity of productivity effects of inter‐industry technology spillover is not only larger than that of direct R&D input, but also increases over time. We group the industries into four major categories and find that the inter‐industry technology spillover effect within the categories is, on average, greater than that between the four categories, indicating that technology spillover occurs more easily between similar industries. This research shows that the interindustry technology spillover effect in China has begun to increase, and the government should take advantage of this effect.