ABSTRACT
Based on the role of innovation in domestic economic development circulation (DEDC) and the impact of international economic development circulation (IEDC) on innovation, we construct an analytical framework for the mediation effect of innovation. Drawing on China’s provincial panel data, we employ the causal steps approach to explore the impacts of IEDC on each link in the DEDC through the mediation effect of innovation. The results show that import have a direct effect on each link and export have a negative influence on distribution and consumption. Outward foreign direct investment (OFDI) has a negative impact on production and circulation through innovation. Foreign direct investment (FDI) and invisible ways have different indirect effects on each process. In addition, the influence of IEDC decreases from east to west in China, whereas import and export better promote DEDC in the central and western regions.
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Song Wang
Song Wang is a lecturer of School of Business Administration, Northeastern University, Shenyang, China. His research interests include scientific and technological innovation, ecological environment and regional economics.
Dailing Hou
Dailing Hou is a student pursuing a bachelor degree of School of Business Administration, Northeastern University, Shenyang, China. Her research interests include regional innovation.
Yixin Guo
Yixin Guo is a student pursuing a bachelor degree of School of Business Administration, Northeastern University, Shenyang, China. Her research interests include environmental policy.
Liang Dai
Liang Dai is an associate professor of School of Public Administration, Nanjing University of Finance and Economics, Nanjing, China. Her research interests include urban networks and open innovation system, economic geography.