Comparing the Efficiency of Regional Knowledge Innovation and Technological Innovation: A Case Study of China

Abstract

The combination of knowledge innovation and technology innovation provides vitality for social science and technology innovation. China leaps into the front ranks of the world in the 2021 Global Innovation Index (GII). Therefore, this research takes China's theoretical-application innovation as the research object and empirically analyzes measure the innovation efficiency of knowledge innovation dominated by universities and technological innovation dominated by enterprises in China, as well as the gravity-center migration trajectory. The results show that the ranking of overall efficiency of theoretical innovation-application innovation is eastern region > central region > western region. Knowledge innovation presents a drag on overall efficiency, while technology innovation offers a contribution to overall efficiency. In the analysis of PIE (R&D personnel of industrial enterprises above a designated size) variables, the efficiency value is relatively low. The peak value of kernel density increases in the eastern, central and western regions, namely the concentration degree of theoretical innovation-application innovation efficiency in China has risen. The gravity center of each stage migrates to the eastern region, meaning the efficiency value of China’s theoretical innovation and application innovation increases more significantly in the eastern region. From the perspective of knowledge innovation and technology innovation, this paper puts forward suggestions for China and provides some references for other developing countries.

What Drives China’s Long-Term Economic Growth Trend? A Re-Measurement Based on a Time-Varying Mixed-Frequency Dynamic Factor Model

“…In the second phase (2018-present), the growth rate of TFP continues to decline with an obvious trend of negative growth, which suggests that the Chinese economy has entered a typical period of technological recession. This noteworthy phenomenon further confirms the hypothesis brought by Liu and Xia (2018) and Shi et al (2022) that fail to verify: comprehensive technological regression caused by the capital-technology mismatch is another key reason for the downward trend of China's economic growth. The complex causes of technological regression can be summarized in two aspects.…”

“…Given that technological cycle is relatively long and changes slowly, the current decelerated economic growth is more likely to be a long-term trend. Di Giovanni et al (2014), Zhang (2021) and Shi et al (2022) all examine the above mismatch problem, and find that the declined rate of capital utilization due to technological progress is another trigger of China's decelerated economic growth.…”

“…( 19) is critical because TFP measures the degree of match between technology and capital. According to the theory of technological recession as in Liu and Xia (2018) and Shi et al (2022), the mismatch between capital and labor is likely to be a key factor affecting China's labor productivity growth. Decomposing this indicator helps to compare the impact of theories of investment decline, diminishing demographic dividend and technological recession on the trend.…”

“…Nevertheless, as China's real income per capita surpasses the middle-income threshold, its demographic dividend has considerably diminished relative to other emerging economies such as Vietnam, Burma and India, which essentially determines a systematic downward trend of economic growth rate. Thirdly, the theory of technological recession (e.g., Liu & Xia, 2018;Shi et al, 2022) studies the downward trend of China's economic growth with respect to its decelerating technological progress. Although China's rapid economic growth has once been heavily reliant on technology acquisition, the present low-hanging fruit of technology has been plucked as technology advances.…”

“…Secondly, in the case of investigating the causes of changes in economic growth trend, it is necessary to consider other drivers besides traditional factors of production such as capital, labor and technology. For example, Liu and Xia (2018) and Shi et al (2022) find that China faces mismatch in capital deepening, that is, the decline in capital utilization driven by technological progress. Hence, we should take this into full consideration during production function decomposition.…”