Journal
TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE
Volume 79, Issue 1, Pages 127-141Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.techfore.2011.08.005
Keywords
China; Research and Development (R&D); Productivity; Semiparametric smooth coefficient model (SPSCM)
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This paper analyzes the impact of Research and Development (R&D) on the productivity of China's high technology industry. In order to capture important differences in the effect of R&D on output that arise from geographic and socioeconomic differences across three major regions in China, we use a novel semiparametric approach that allows us to model heterogeneities across provinces and time. Using a unique provincial level panel dataset spanning the period 2000-2007, we find that the impact of R&D on output varies substantially in terms of magnitude and significance across different regions. Results show that the eastern region benefits the most from R&D investments, however it benefits the least from technical progress, while the western region benefits the least from R&D investments, but enjoys the highest benefits from technical progress. The central region benefits from R&D investments more than the western region and benefits from technical progress more than the eastern region. Our results suggest that R&D investments would significantly increase output in both the eastern and central regions, however technical progress in the central region may further compound the effects of R&D on output within the region. (C) 2011 Elsevier Inc. All rights reserved.
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