Social Sciences in China (Chinese Edition)

No.7, 2015

 

An Evaluation of Chinese Technological Progress and the Convergence of Economic Growth—From the Perspective of Innovation and Efficiency

(Abstract)

 

Su Zhi and Xu Shudan

 

Innovation provides the impetus for sustained economic growth. This paper decomposes technological progress into technological innovation and technological efficiency. Using data on Chinese industry for 1991-2012, we combine multiple-period analysis and stochastic frontier analysis in our analysis of data envelopment, so as to analyze changing trends in the contribution of technological progress to economic growth and investigate the development path and trend toward convergence of the Chinese economy under the impact of technological factors. Our findings show that over nearly two decades of rapid economic development, the contribution of technological efficiency was not great; the real impetus for effective Chinese technological progress came from technological innovation. Sustained industrial growth mainly depended upon technological innovation and improvement, but when these factors were sluggish or even stagnated, improvements in technological efficiency appeared as substitutes for or supplements to technological innovation, thus maintaining effective technological progress. In industries which are highly monopolistic, improvements in technological efficiency relied mainly on capital accumulation, while in highly competitive industries it mainly depended on the improved efficiency of organizational management. Only the balanced development of different industries can bring about more extensive technological innovation and improved technological efficiency, thus guaranteeing long-term sustainable economic growth.