An Explanation for China’s Economic Growth: Expenditure on R&D Promotes Economic Growth —Based on China’s Provincial Panel Data of 1997-2013

Huachun Wang; Dingchang Wu

doi:10.4236/jssm.2015.86082

Home > Journals > Business & Economics > JSSM

Journal of Service Science and Managemen... > Vol.8 No.6, December 2015

An Explanation for China’s Economic Growth: Expenditure on R&D Promotes Economic Growth
—Based on China’s Provincial Panel Data of 1997-2013 ()

Huachun Wang, Dingchang Wu^*

School of Government, Beijing Normal University, Beijing, China.

DOI: 10.4236/jssm.2015.86082 PDF HTML XML 2,289 Downloads 2,866 Views Citations

Abstract

There are so many reasons to explain the China’s economic growth. This paper tries to give a different perspective. This study examines the relationship between expenditure on R&D from government and enterprise and economic growth by using China’s provincial panel data of 1997-2013 with a multiple linear regression. The study finds that there is a strong and positive correlation between expenditure on R&D and economic growth. Moreover, the study has a new finding. Compared to enterprise R&D strong correlation, the correlation between government R&D expenditure and the economic growth is nearly zero. One possibility is that government R&D expenditure is more directed toward basic research, which does not directly promote economic growth. The finding does not imply that government R&D expenditure is not a necessary component for economic growth. Both enterprise and government R&D expenditure are important for economic growth.

Keywords

Government R&D Expenditure, Enterprise R&D Expenditure, Innovation Growth, Regression Analysis, Economic Growth

Share and Cite:

Wang, H. and Wu, D. (2015) An Explanation for China’s Economic Growth: Expenditure on R&D Promotes Economic Growth
—Based on China’s Provincial Panel Data of 1997-2013. Journal of Service Science and Management, 8, 809-816. doi: 10.4236/jssm.2015.86082.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	Robert, S. (1957) Technical Change and the Aggregate Production Function. Review of Economics and Statistics, 39, 312-320. http://dx.doi.org/10.2307/1926047
[2]	Kevin, S. (2001) R&D and Economic Growth. Knowledge, Technology & Policy, 13, 71-84. http://dx.doi.org/10.1007/BF02693991
[3]	Kuo, C.C. and Yang, C.H. (2008) Knowledge Capital and Spillover on Regional Economic Growth: Evidence from China. China Economic Review, 19, 594-604. http://dx.doi.org/10.1016/j.chieco.2008.06.004
[4]	Bronzini, R. and Piselli, P. (2009) Determinants of Long Run Regional Productivity with Geographical Spillowers: The Role of R&D, Human Capital and Public Infrastructure. Regional Science and Urban Economic, 39.
[5]	Griliches, Z. (1979) Issues in Assessing the Contribution of Research and Development to Productivity Growth. Bell Journal of Economics, 10, 92-116. http://dx.doi.org/10.2307/3003321
[6]	Salter, A.J and Martin, B.R. (2001) The Economic Benefits of Publicly Funded Basic Research: A Critical Review. Research Policy, 303, 509-532. http://dx.doi.org/10.1016/S0048-7333(00)00091-3
[7]	John, N.I. (2014) The Contribution of R&D Expenditure to Economic Growth in Developing Economies. Social Indicators Research.
[8]	Park, W.G. (1995) International R&D Spillovers and OECD Economic Growth. Economic Inquiry, 33, 571-591. http://dx.doi.org/10.1111/j.1465-7295.1995.tb01882.x
[9]	Ishaq Nadiri, M. (1993) Economic Research Reports: Innovations and Technological Spillovers. New York University Faculty of Arts and Science Department of Economics Washington Square, New York. http://dx.doi.org/10.3386/w4423
[10]	Griliches, Z. and Mairesse, J. (1984) Comparing Productivity Growth: An Exploration of French and U.S. Industrial Firm Data. European Economic Review, 21.
[11]	Griffith, R., Harrison, R. and Van, R.J. (2006) How Special Is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing. American Economic Review, 96.
[12]	Enha, H., Hong, L. and Long, Z. (2006) An Empirical Analysis of Economic Effect of China’s Science and Technology Investment. Science Research Management, 4, 71-75.
[13]	Kai, W. and Zhen, P. (2010) Fiscal Expenditure for Science & Technology and Economic Growth in China: 1978-2008. Science Research Management, 1, 103-106.
[14]	Yun, Z. and Zheng, C.B. (2007) The Co-Integration Relationship of Fiscal Expenditure on Science and Technology and Economic Growth. Finance and Economics, 7, 53-59.
[15]	Fan, B.N., Jiang, L. and Luo, J.M. (2004) Research on Relationship between the Expenditure for Science & Technology and the Economic Growth. Science Research Management, 5, 104-109.
[16]	Lu, F.Y. and Jin, D.D. (2011) An Empirical Analysis on the Effect of R&D Input to Economic Growth Based on Panel Data. China Industrial Economics, 3, 149-157.