THE IMPACT OF R&D EFFICIENCY ON ECONOMIC GROWTH IN CHINA: NON-LINEAR THRESHOLD EFFECTS-Reference-Cited by-同舟云学术

THE IMPACT OF R&D EFFICIENCY ON ECONOMIC GROWTH IN CHINA: NON-LINEAR THRESHOLD EFFECTS

Published:2024-05-29 Issue:5 Volume:30 Page:1205-1228
ISSN:2029-4913
Container-title:Technological and Economic Development of Economy
language:
Short-container-title:

Author:

Liao Chang-Sheng¹^ORCID,Li Xinyan²^ORCID

Affiliation:

1. School of Economics and Management, Hubei Polytechnic University, Hubei, China

2. School of Accountancy, Dongbei University of Finance and Economics, Liaoning, China

Abstract

This study uses a threshold estimation technique to examine whether the effect of R&D efficiency on economic growth in China differs according to the level of financial development. The results broadly confirm a nonlinear relationship between R&D efficiency and economic growth due to the dynamic and static threshold effects of financial development and R&D expenditure. This finding suggests that R&D efficiency does not significantly impact growth in the low and middle-financial development provinces at conventional levels. Hence, the benefit of R&D efficiency in China could stem from the positive effect of R&D in highly financially developed provinces. Though R&D efficiency is poor, R&D investment still enhances economic growth because the amount of R&D investment is enormous. This finding suggests that while it is most important to not unthinkingly expand R&D gross investment, it is also necessary to make full use of R&D investment by improving R&D efficiency.

Publisher

Vilnius Gediminas Technical University

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