American export control, technology spillover and innovation of Chinese pharmaceutical Industry

Abstract

This paper was aimed to analyze whether the U.S. strict export control to China affects the technological innovation of Chinese pharmaceutical industry. This paper selected the data of technological innovation and the expenditure of high and new technology adoption in China's pharmaceutical industry from 1995 to 2014, created panel regression model to study the impact of export controls on technology spillovers and the impact of technology spillovers on innovation capacity. The results show that US export control has a significant impact on technology spillovers, but foreign technology spillovers have no significant impact on the innovation of Chinese pharmaceutical industry. Although the US export control prevented foreign technology spillovers to China, but indirectly stimulated the domestic technology spillovers to pharmaceutical manufacturing industry in China. Statistical analysis show that the correlation coefficient between innovation capacity and expenditure for high technology adoption is not significant, but the expenditure of purchasing domestic technical is essential to pharmaceutical innovation. This study shows that US export control indirectly, not directly, affected the technological innovation of China's pharmaceutical industry, affected the allocation of innovative resources, but failed to prevent the technological progress and competitiveness improvement of Chinese pharmaceutical industry.