International knowledge spillovers through returning entrepreneurs and innovation in Chinese high-tech small and medium enterprises

The new growth theory assumes that firms exist exogenously and then engage in the pursuit of new knowledge as input into the process of generating innovative activity (Griliches, 1979; Romer, 1986). Influenced by such theoretical developments, intensive research has been conducted on the effect of technology spillovers on host countries via foreign direct investment (FDI) and trade, which have been regarded as the main vehicle for technology spillovers (Grossman and Helpman, 1991; Blomstrom and Kokko, 1998; Buckley et al., 2002; Liu and Wang, 2003; Keller and Yeaple, 2003; Marin and Bell, 2006). However, in a new global economy, knowledge spillovers not only occur through FDI and trade, but also take place through human mobility, given that scientific and technical human capital has become more mobile and is now more easily able to cross national borders than ever before.