1 The Spatial Econometric Analysis of Internet Diffusion on Provincial Patent Innovation in China

The paper applies methods of spatial econometrics to examine the effect of Internet diffusion on patent innovation and its spatial spillovers between provinces in China based on cross-province data for 2001 to 2007. The empirical results show that Internet diffusion plays an important role in patent innovation process, and spatial spillovers of the province to its neighbors are positive but week when spatial effect of endogenous spatial lag variable is taken into consideration.