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The Research of Factors Influencing Technological Innovation and Technological Progress of Fujian Province

Author: ZhangHua
Tutor: XuPeiYuan
School: Huaqiao University
Course: Quantitative Economics
Keywords: Technological innovation Technological progress Influencingfactors Bayesian Model Averaging (BMA)
CLC: F124.3
Type: Master's thesis
Year: 2013
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Abstract

Technological innovation capability and technological progress rate are coreindicators of the level of innovation and the degree of change in the mode ofeconomic development of a country or a region, but they are both interrelated andmutually different. Based on distinguishing their difference, this paper firstlyestablished the framework of calculating the Total Factor Productivity (TFP) of R&Dand production according to the input-oriented Data Envelopment Analysis (DEA)method to measure Fujian’s technological innovation capability and technologicalprogress rate, and then introduced the model uncertainty to research the influencingfactors related to Fujian’s technological innovation and technological progress. Dueto the openness and complexity of the economic system, there are too many potentialinfluencing factors and the researchers were unable to determine which factors shouldbe the true explanatory variables, or the model of technological innovation andtechnological progress is uncertain. Setting models and choosing variables artificiallybefore the estimation by most previous studies may lead to systematic deviations.Therefore, this paper introduced the use of Bayesian Model Averaging (BMA) byconsidering the model uncertainty. After more than one million times of regression,we classified and sorted the chosen variables of affecting Fujian’s technologicalinnovation and technological progress in accordance with their importance whichmeasured by Posterior Including Probability (PIP) and robustness. The results showedthat:(1) from1987to2011, Fujian’s technological innovation capability andtechnological progress rate showed clearly different changing trend: Fujian’stechnological innovation capability significantly enhanced while its technologicalprogress change is not obvious;(2)innovation inputs are not the determinants ofinnovation capability; international trade, international investment and regionaltechnological environment enhanced Fujian’s technological innovation capability, butthe positive and negative effects co-existed; the innovation behaviors by enterpriseswho want to obtain monopoly profits can still not drive the overall technologicalinnovation in Fujian province; research institutions and universities play significant roles in the process to promote Fujian’s technological innovation at this stage; incontrast, the government as a main innovator, objective results violate its subjectivewishes apparently;(3)in the analysis of technological progress, the classicalEndogenous Growth Theory which emphasizes R&D inputs and human capital waslack of explanatory ability; the New Trade Theory and International InvestmentTheory which pay attentions to international technology spillover could give someguides somewhat and Spatial Economics which focuses on regional technologyspillover explained more reality;(4)although the affecting factors are different fortechnological innovation and technological progress in Fujian province, R&D inputs,human capital of Fujian province have no significant effect on its innovationcapability and technological progress; on the contrary, technology spillovers causedby international trade and international investment contributed more to Fujian’stechnological innovation and technology progress. Therefore, Fujian should pay moreattention to the role of trade and investment and try to optimize trade and investmentenvironment in the short term; but in the long run, Fujian must strive to enhance thelevel of human capital and innovation capacity. On the one hand, it must increaseinnovation inputs; on the other hand it must improve the efficiency of transformingthese resources to outputs.

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