The determinants of China's inter-provincial R&D intensity: Evidence from the dynamic panel models of interprovincial data

Abstract

Since investments in R&D have been identified as a major engine of growth by the proponents of the endogenous growth models, many studies have investigated the determinants of R&D intensity. In this study, our primary objective is to establish, empirically, the determinants of inter-provincial R&D intensity in China over the period 2001 to 2010. We collected both crosssectional and time series data for 31 provinces, municipalities, and autonomous regions of China and the estimation of our model was done using the fixed effect model, random effect model, Difference GMM, and System GMM. Our findings reveal that factors such as economic development level, investment in science and technology, and human capital have a significant positive effect on R&D Intensity, but trade openness has a negative and significant impact on R&D intensity. Even though the fixed asset investment has a negative relationship with R&D intensity, it is not statistically significant.