Domestic Innovation and Chinese Regional Growth, 1991–2004

Many other papers, notably those of Jefferson et al. (1996, 1997, 2002, 2003) have examined foreign investment and innovation in China. Other papers listed in the Appendix to this paper give the history and development of examinations of the modern Chinese innovation system. The contribution of this paper is its focus on the contributions of Chinese domestic innovation to economic growth at the provincial level.We have elsewhere (Latham and Yin 2009) described the nature of China’s domestic innovation system. Such an examination is a necessary part of an assessment of whether or not policies that promote domestic R&D, such as China’s Science and Technology Policy, could be productive for China’s regions. We are grateful for the comments of an anonymous referee for helping us to clarify that our work on the effects of innovation on growth cannot reveal whether or not the Science and Technology policies in place during the whole period have actually had any effect because we do not have data for the counterfactual. Our results show only that, if S&T policies promote innovation and innovation has an effect on grow, then S&T policy may be effective in promoting growth.