The moderating effect of absorptive capacity on transnational knowledge spillover and the innovation quality of high-tech industries in host countries: Evidence from the Chinese manufacturing industry

Abstract A considerable literature has grown up around the theme of the impact of knowledge spillover on the firm's innovation performance. Nevertheless, few literatures draw on any research into the impact of transnational knowledge spillover on innovation quality, especially from conscious and unconscious perspectives. What's more, it has been proven that absorptive capacity plays a crucial role on innovation quality, while the relationship between knowledge spillover and absorptive capacity and its impact on innovation quality have yet to be identified. This study therefore defines the transnational knowledge spillover and distinguishes it from involuntary to voluntary, analyzes their impact on the innovation quality of high-tech industries in host countries, and builds a theoretical model that involves absorptive capacity as the moderating variable. Meanwhile, this study collects data on China's high-tech manufacturing industries from 2010 to 2017 to conduct an empirical analysis and the main results were described as following: with an increase in unconscious transnational knowledge spillover, the innovation quality of high-tech manufacturing industries firstly decreases and then increases. Conversely, with an increase in conscious transnational knowledge spillover, the innovation quality of high-tech manufacturing industries firstly increases and then decreases. Impressively, absorptive capacity has a significant positive moderating effect on the relationship between transnational knowledge spillover and the innovation quality of high-tech industries in host countries.