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Domestic Innovation And Chinese Regional Growth, 1991-2004

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Executive Summary

In this paper the authors examine the return to innovation in terms of economic growth at the provincial level to assess whether or not policies that promote R&D, such as China's Science and Technology Policy, have been productive for all of China's regions. The return to innovation at the provincial level is estimated using a value-added Cobb-Douglas production function. The measure of the effect of innovation (patenting activity) is valued-added industrial output. The data are a balanced panel for 30 provinces for the period 1991-2004. The estimation results indicate that technology plays a positive role in China's provincial growth, but the contribution from technology (and thus from China's Science and Technology Policy) is small.

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