Spatial processes of regional innovation in Guangdong Province, China: empirical evidence using a spatial panel data model

Spatial processes are highly relevant phenomena in innovation studies. Regional innovation isboth influenced by heterogeneous regional attributes and the neighbouring innovation factors. Spatial econometrics are developed to explicitly cope with the issues of spatial dependence. This paper aims to reveal the spatial processes of regional innovation at the city scale byincluding the spatial terms in panel data specification. The research region, GuangdongProvince, has developed into one of innovation hubs in China. Panel data set in 21municipalities in Guangdong Province over the period of 2001– 2013 has been established. The spatial panel data model shows that regional innovation in Guangdong is driven byR&D expenditure input. Besides, inflow of external knowledge boosts the innovation outputthrough foreign investment stock and imported goods, and it strengthens its role asinnovation impetus for the neighbouring cities with the spatial spillover effect. Meanwhile,the depth and width of knowledge accumulated by specialisation economy anddiversification economy contribute to innovation both for the city itself and theneighbouring cities. Overall, the paper has succeeded in revealing the effect of spatialdependence of innovation output, as well as the ‘spilling over’ of the innovation factors ondistance-based spatial relations.