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Calculation and analysis of the efficiency of resource allocation for technological innovation in China

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  • Ruying Chen
  • Lanyu Wu

Abstract

The efficiency of resource allocation in technological innovation is a critical factor influencing the output level of technological innovation. By expanding and optimizing the Hsieh & Klenow (2009) framework for analyzing the efficiency of resource allocation and relaxing the assumption of constant returns to scale, this study utilizes sample data from Chinese listed companies from 2007 to 2019 to measure and analyze the resource allocation efficiency level in China’s technological innovation. The findings indicate that in the process of technological innovation, companies face heterogeneous resource usage costs, leading to a deviation from the optimal resource allocation state, with evident issues of resource misallocation. The loss of efficiency in technological innovation output due to resource misallocation is significant, and addressing this issue can substantially enhance the level of technological innovation output. The misallocation of research and development capital resources is more severe than that of research and development personnel, resulting in greater efficiency losses in technological innovation output. Government subsidies are identified as a significant factor affecting resource allocation in technological innovation. Addressing the issue of resource misallocation, accelerating the market-oriented reforms of technological innovation resource allocation, and optimizing the government subsidy screening mechanism are crucial for improving the efficiency of resource allocation in technological innovation.

Suggested Citation

  • Ruying Chen & Lanyu Wu, 2024. "Calculation and analysis of the efficiency of resource allocation for technological innovation in China," PLOS ONE, Public Library of Science, vol. 19(8), pages 1-20, August.
    • Handle: RePEc:plo:pone00:0308960
    DOI: 10.1371/journal.pone.0308960
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    References listed on IDEAS

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