The Government Intervention And The Lack Of Creative Destruction In China: A Theoretical And Empirical Analysis

Nowadays the long-term coexistence of the rapid economic growth and the low level of technical innovation is an indisputable fact in China. This dissertation introduces the political factor into the endogenous technical innovation model, constructs the model in accordance with China's national conditions, and analyzes the effect of the political factor on the technical innovation. Based on the data of the listed companies from 2000 to 2008, this dissertation adopts the empirical methods to analyze the effect of the scale and the political factors on the technical innovation. Then it is the stability test of the technical innovation input and R2. Finally this dissertation gives the policy recommendations. Both the theory and the empirical analysis prove that the government intervention is the key factor of being lack of creative destruction in China, and the appropriate technology theory can't explain this problem.The analysis of the model finds out: siding with monopoly companies in policy will undermine the monopoly and non-monopoly companies' innovation motivation. Moreover, non-monopoly companies reduce the research input and the probability of being monopoly companies' intermediate goods producers increases. So the game between monopoly companies and non-monopoly companies will become the competition for the capital and labors, and the companies compete for the quantities of resources but neglect the quality of resources, which makes the probability of endogenous technological innovation greatly drop. The companies will enlarge the capital input to sustain the economic growth.The results of the regression analysis show: Firstly, the technical innovation output and the technical innovation input are significantly positive correlation. In the technical innovation output, compared to the technical progress output, the technical efficiency output is a larger part. And compared to the relation of the technical progress output and the technical innovation input, the technical efficiency output and the technical innovation input are more significantly correlation, which shows more technical innovation input is used to the improvement of technical efficiency. Secondly, the larger is the scale of the companies, the higher is the technical innovation output, which shows the large-scale companies have more technical innovation capability. The expansion of the scale is beneficial for the companies to increase the technical efficiency input, and makes the efficiency of the technical progress input of the companies decrease. Thirdly, no evidence shows political relations are beneficial for companies to take technical efficiency improvement or innovation activities; on the contrary, political relations decrease innovation productivity of the large-scale companies. Fourthly, the technical innovation input of the companies can be reflected in the firm-specific information in the stock price fluctuation of the transitional economic environment in China. The change of the firm-specific information can't determine the next technical innovation input of the firm because of the complexity of the firm-specific information structure and the factors of the technical innovation input.Finally, the policy recommendations of this dissertation are based on the theoretical model and empirical analysis: we should take measures to reduce the policies siding with state-owned companies, and to support small and medium-scale companies more, which can help us to solve the problem that China is lack of creative destruction.