The Study Of Relationship Between Regional Indigenous Innovation Capability And Economic Development Quality In China

Regional indigenous innovation capability is a critical problem which greatly influences economic society development. Furthermore, the research of Regional indigenous innovation capability is the most important aspect based on the macro level. At present, the total level of Regional indigenous innovation is lower and the economic development is in coarse configuration. However, the research of Regional indigenous innovation lacks qualitative analysis and strict demonstration. So, establishing the evaluation and framework of Regional indigenous innovation capability and analyzing the relationship between the formal measurement and other regional development quality is becoming an important and practical task.A conceptual model of regional indigenous innovation capability is set up based on the all kinds of capability development theory from macro perspective and focusing on reform and open policy in China. Through the concrete evaluation of regional indigenous innovation capability, we propose the research hypothesis of relationship between regional economic development quality and regional indigenous innovation capability. In reference of new development theory, the measurable analysis model is set up to further multi-level demonstration and draws corresponding conclusion and policy.The results shows that regional indigenous innovation capability is composed of technological capability (technological input capability, technological output performance, technological transfer and absorb capability, technological support capability), institutional capability (property right and non-national level, open degree, civilization level and government scale), and the interactive comprehensive indexes, Which fully reflect Regional indigenous innovation capability. Furthermore, the differences among regional indigenous innovation capability from the perspective of time and panel data demonstrate the importance of indigenous innovation capability evaluation, which also proves the correct selection of measurement indexes.It is also proved in this paper that TFP is the effective indicator to represent the regional economic development quality from the macro level in China. This is well manifested not only in the differences of regional transverse comparison but also in the annual regional TFP. Sometimes, it is manifested in the highly obvious positive correspondence of regional TFP and its economic development level (GDP).The results show that through the demonstration of knowledge capital, technological capability indicator, institutional capability indicator and indigenous innovation capability indicators, indigenous innovation capability obviously positive influences regional TFP development. It also tests the relationship between indigenous innovation development and economic quality development from the point of formal econometric analysis.This paper indicates that the indigenous innovation capability is endogenous, therefore in order to estimate the impact of it on economic performance, we need a source of exogenous variance in the indigenous innovation capability. In this paper, we look for instrumental variables through different perspectives of geography, history and resource endowments, which are more probably exogenous. Through the method of instrumental variables, which is Two-Stage Least Square concluding instrumental variables, the argument that the indigenous innovation capability promotes economic growth becomes more robust. Furthermore, compared with Ordinary Least Square without instrumental variables, we find that because of the endogeniety of the major independent variable, the outcome of Ordinary Least Square is obviously smaller and underestimates the impact of the indigenous innovation capability on regional TFP.This research brings good benefits for innovation capability theory and relevant practice. From the perspective of theory, it greatly enriches the macro-level capability theory, new economic development theory and econometric analysis. From the point of practice, this research will provides good suggestions for our macro economic management, especially for technological development, institutional reform and open policy.