Abstract: Based on the R&D spillover model and with the consideration of time lag, this paper verifies the effects of technology innovation in high-tech industries on service firms, by use of the panel data of 30 provinces in the year 2004-2012. According to the empirical research, the patents in force of High-tech industries play the most significant role in the development of services with a time lag of 2 years. Besides, indirect input of R&D funds also has a significant effect on services with a time lag of 3 years. However, the effect of new product sales of High-tech industries on services is very weak or even insignificant. The result shows a significant spillover effect of high-tech industries on service firms, which promote the innovative progress of services by means of improving the productivity and technology capacity in service firms.

Key words: technology innovation, spillover effects, indirect input of R&D funds, services, high-tech industries