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Can private domestic investment lead Chinese technological progress?

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  • Chen, Hong
  • Wang, Xi
  • Singh, Baljeet

Abstract

This study examines the effects of private domestic investment (PDI), foreign domestic investment (FDI), state-owned units’ investment (SOI) and their interactions on technological progress in China. Specifically, we test whether PDI leads Chinese technological progress, and crowd-out effects from FDI and SOI. The empirical analysis is based on panel data consisting of 29 Chinese provinces and municipalities over 1989–2014. We extract technological progress using the panel stochastic frontier model and examine its determinants. Our findings suggest that while PDI, FDI and SOI all positively contribute to technological progress in China, PDI is the dominant contributor.

Suggested Citation

  • Chen, Hong & Wang, Xi & Singh, Baljeet, 2018. "Can private domestic investment lead Chinese technological progress?," Economic Modelling, Elsevier, vol. 70(C), pages 186-193.
    • Handle: RePEc:eee:ecmode:v:70:y:2018:i:c:p:186-193
    DOI: 10.1016/j.econmod.2017.11.002
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    Cited by:

    1. Kumar, Sanjesh & Singh, Baljeet, 2019. "Barriers to the international diffusion of technological innovations," Economic Modelling, Elsevier, vol. 82(C), pages 74-86.
    2. Chen, Jiandong & Gao, Ming & Shahbaz, Muhammad & Cheng, Shulei & Song, Malin, 2021. "An improved decomposition approach toward energy rebound effects in China: Review since 1992," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    3. Guo, Shen & Jiang, Zheng & Shi, Huimin, 2018. "The business cycle implications of bank discrimination in China," Economic Modelling, Elsevier, vol. 73(C), pages 264-278.
    4. Yang, Zikun & Zhang, Mingming & Liu, Liyun & Zhou, Dequn, 2022. "Can renewable energy investment reduce carbon dioxide emissions? Evidence from scale and structure," Energy Economics, Elsevier, vol. 112(C).
    5. Seenaiah Kale & Badri Narayan Rath, 2018. "Does Innovation Enhance Productivity In Case Of Selected Indian Manufacturing Firms?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1225-1250, November.
    6. Chen, Hong & Wang, Xi & Singh, Baljeet, 2021. "Transient and persistent inefficiency traps in Chinese provinces," Economic Modelling, Elsevier, vol. 97(C), pages 335-347.
    7. Min, Feng & Wen, Fenghua & Wang, Xiong, 2022. "Measuring the effects of monetary and fiscal policy shocks on domestic investment in China," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 395-412.

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    More about this item

    Keywords

    Technological progress; FDI; Private domestic investment; State-owned investment; Stochastic frontier analysis;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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