IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/117113.html
   My bibliography  Save this paper

Endogenous Technological Change Model and Economic Growth in China: A Firm-Level Analysis

Author

Listed:
  • Ofei, Edmund Okraku

Abstract

China’s economic growth has been impressive since the 1978 reforms and even much better in the last two decades. The dominant composition of China’s merchandized exports having changed from less sophisticated primary goods during the reforms to more sophisticated machinery and electronic products in recent years, and hence rapid economic growth, there has been an increasing need to investigate the existence of evidence of the predictions of the endogenous technological change model in China’s growth especially since capital accumulation, the factor which is widely credited to have propelled growth in China becomes obsolete with increasing quantities. The study therefore employs a combination of logistic regression, OLS, and high-dimension fixed effects to examine the existence of the growth inducing 3 formal sectors of the Romer (1990) model. The findings show China’s to have properly implemented the endogenous technological change model and transitioned from their prior dependence on capital accumulation.

Suggested Citation

  • Ofei, Edmund Okraku, 2020. "Endogenous Technological Change Model and Economic Growth in China: A Firm-Level Analysis," MPRA Paper 117113, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:117113
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/117113/1/Endogeneous_Technological_Change_OFEI.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Xu, Yilan, 2017. "Innovation in Enterprises and Enterprises Characteristics: A Survey study in China," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252847, Southern Agricultural Economics Association.
    3. LI, Hongyi & HUANG, Liang, 2009. "Health, education, and economic growth in China: Empirical findings and implications," China Economic Review, Elsevier, vol. 20(3), pages 374-387, September.
    4. Charles I. Jones, 2019. "Paul Romer: Ideas, Nonrivalry, and Endogenous Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 859-883, July.
    5. Silva, Maria José & Leitão, João, 2007. "What Determines the Entrepreneurial Innovative Capability of Portuguese Industrial Firms?," MPRA Paper 5216, University Library of Munich, Germany.
    6. Philippe Aghion, 2002. "Schumpeterian Growth Theory and the Dynamics of Income Inequality," Econometrica, Econometric Society, vol. 70(3), pages 855-882, May.
    7. Sai Ding & John Knight, 2011. "Why has China Grown So Fast? The Role of Physical and Human Capital Formation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(2), pages 141-174, April.
    8. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.
    9. Flora Wang, 2016. "What are the biggest obstacles to growth of SMEs in developing countries? - A picture emerging from an enterprise survey," Working Papers IES 2016/09, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2016.
    10. Hanley, Aoife & Liu, Wan-Hsin & Vaona, Andrea, 2011. "Financial development and innovation in China: Evidence from the provincial data," Kiel Working Papers 1673, Kiel Institute for the World Economy (IfW Kiel).
    11. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    12. Lijia Guo & Jiashun Huang & You Zhang, 2019. "Education Development in China: Education Return, Quality, and Equity," Sustainability, MDPI, vol. 11(13), pages 1-20, July.
    13. Ugur, Mehmet, 2016. "Modeling growth: exogenous, endogenous and Schumpeterian growth models," Greenwich Papers in Political Economy 14665, University of Greenwich, Greenwich Political Economy Research Centre.
    14. Huang, Yanghua & Salike, Nimesh & Yin, Zhifeng & Zeng, Douglas Zhihua, 2017. "Enterprise innovation in China: Does ownership or size matter?," RIEI Working Papers 2017-06, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    15. Gregory C. Chow, 1993. "Capital Formation and Economic Growth in China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 809-842.
    16. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    17. Ding, Sai & Knight, John, 2009. "Can the augmented Solow model explain China's remarkable economic growth? A cross-country panel data analysis," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 432-452, September.
    18. Lai, Mingyong & Peng, Shuijun & BAO, Qun, 2006. "Technology spillovers, absorptive capacity and economic growth," China Economic Review, Elsevier, vol. 17(3), pages 300-320.
    19. Hooi Hooi Lean & Yingzhe Song, 2009. "The domestic savings and economic growth relationship in China," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 2(1), pages 5-17, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lili Kang & Fei Peng, 2018. "Economic Reform and Productivity Convergence in China," Arthaniti: Journal of Economic Theory and Practice, , vol. 17(1), pages 50-82, June.
    2. Celine Bonnefond, 2014. "Growth Dynamics And Conditional Convergence Among Chinese Provinces: A Panel Data Investigation Using System Gmm Estimator," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 1-25, December.
    3. Vincenzo Lombardo, 2008. "Income distribution and Growth: A Critical Survey," Working Papers 11_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    4. Oukhallou, Youssef, 2016. "Analyzing economic growth: what role for public investment?," MPRA Paper 69772, University Library of Munich, Germany.
    5. Karatheodoros Anastasios & Tsamadias Constantinos & Pegkas Panagiotis, 2019. "The effects of formal educations’ levels on regional economic growth in Greece over the period 1995–2012," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 39(1), pages 91-111, February.
    6. Rana P. Maradana & Rudra P. Pradhan & Saurav Dash & Kunal Gaurav & Manju Jayakumar & Debaleena Chatterjee, 2017. "Does innovation promote economic growth? Evidence from European countries," Journal of Innovation and Entrepreneurship, Springer, vol. 6(1), pages 1-23, December.
    7. Chi, Wei & Qian, Xiaoye, 2009. "The role of education in regional innovation activities and economic growth: spatial evidence from China," MPRA Paper 15779, University Library of Munich, Germany.
    8. Daniele Schilirò, 2019. "The Growth Conundrum: Paul Romer’s Endogenous Growth," International Business Research, Canadian Center of Science and Education, vol. 12(10), pages 75-85, October.
    9. Jinzhao Chen, 2015. "Interprovincial Competitiveness and Economic Growth: Evidence from Chinese Provincial Data (1992–2008)," Pacific Economic Review, Wiley Blackwell, vol. 20(3), pages 388-414, August.
    10. Narayan Sethi & Saileja Mohanty & Aurolipsa Das & Malayaranjan Sahoo, 2024. "Health Expenditure and Economic Growth Nexus: Empirical Evidence from South Asian Countries," Global Business Review, International Management Institute, vol. 25(2_suppl), pages 229-243, April.
    11. LI, Hongyi & HUANG, Liang, 2009. "Health, education, and economic growth in China: Empirical findings and implications," China Economic Review, Elsevier, vol. 20(3), pages 374-387, September.
    12. Maciej Stefański, 2020. "To What Extent does Convergence Explain the Slowdown in Potential Growth of the CEE Countries Following the Global Financial Crisis?," KAE Working Papers 2020-058, Warsaw School of Economics, Collegium of Economic Analysis.
    13. M. Herrerias & Vicente Orts, 2012. "Equipment investment, output and productivity in China," Empirical Economics, Springer, vol. 42(1), pages 181-207, February.
    14. Kawalec Paweł, 2020. "The dynamics of theories of economic growth: An impact of Unified Growth Theory," Economics and Business Review, Sciendo, vol. 6(2), pages 19-44, June.
    15. Kumar, Sanjesh & Singh, Baljeet, 2019. "Barriers to the international diffusion of technological innovations," Economic Modelling, Elsevier, vol. 82(C), pages 74-86.
    16. Blomström, Magnus & Kokko, Ari, 2003. "Human Capital and Inward FDI," CEPR Discussion Papers 3762, C.E.P.R. Discussion Papers.
    17. B. Bhaskara Rao & Arusha Cooray, 2012. "How useful is growth literature for policies in the developing countries?," Applied Economics, Taylor & Francis Journals, vol. 44(6), pages 671-681, February.
    18. Liu, Tung & Li, Kui-Wai, 2006. "Disparity in factor contributions between coastal and inner provinces in post-reform China," China Economic Review, Elsevier, vol. 17(4), pages 449-470.
    19. Ghate Chetan, 2003. "The Politics of Endogenous Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-18, August.
    20. Bourguignon, Francois, 2005. "The Effect of Economic Growth on Social Structures," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 27, pages 1701-1747, Elsevier.

    More about this item

    Keywords

    logit; R&D; technological change; China;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:117113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.