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R&D inputs and productivity growth in China

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  • Zheng, Yan

Abstract

The relationship between investment in R&D and productivity growth have been well documented in the literature. So far little research has been done on this topic for China, in part due to data limitations. Using the perpetual inventory method (PIM), this paper first estimates the R&D stock in China between 1978 and 2002. If R&D stock is measured, we can then estimate the elasticity of output with respect to R&D, thus estimate the contribution of R&D investment to output in China. The paper finds China’s economic growth mainly depends on capital input and that the impact of R&D capital on China’s growth is insignificant between 1978 and 2002. Then the essay examines the impact of R&D input on Total Factor Productivity (TFP), and finds that R&D input explains 30% of TFP change in China between 1980 and 2000 and that one percent increase in R&D input leads to 0.27 percent increase in TFP in China. The essay also finds that TFP in China has experienced an unusual fall since 1995.

Suggested Citation

  • Zheng, Yan, 2004. "R&D inputs and productivity growth in China," MPRA Paper 242, University Library of Munich, Germany, revised 25 May 2004.
    • Handle: RePEc:pra:mprapa:242
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    File URL: https://mpra.ub.uni-muenchen.de/242/1/MPRA_paper_242.pdf
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    References listed on IDEAS

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    1. Zvi Griliches, 1998. "R&D and Productivity Growth: Comparing Japanese and U.S. Manufacturing Firms," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 187-210, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Growth; R&D; Total Factor Productivity;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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