An Empirical Study On Appropriate Technology Theory And Regional Economic Disparity In China

Why are some countries so rich while others are so poor? Some cross-country studies on economic growth accounting show that one of the important reasons lies in a gap of technological change between them. Since technology gap exists in reality, why couldn't numerous less developed countries catch up with those developed ones by technological import and imitation? According to the appropriate technology theory, the reason lies in that those new technological innovations are tailored by those innovators, so they are not necessarily appropriate to less developed countries; if less developed countries don't advance their technological capability and improve their economic environment on their own initiative, the distribution structure of the world income will inevitably deteriorate under the joint effects of localized technological change, appropriate technological conditions and different investment rates.In the last 10 years, a widened regional economic disparity has emerged increasingly in China, and there hasn't any evidence to show that the tendency is getting slow down. So far there have been immense numbers of research papers about the reasons behind this phenomenon, but their opinions vary, and there hasn't been a theory that can explain this phenomenon completely and pithily. This not only implies that these studies have limited persuasion, but also that we can try some other perspectives. Well then, can the appropriate technology theory explain the widening regional economic disparity of China recently? This dissertation tries to do so based on an empirical study. The results prove that we can explain the widening regional economic disparity of China in the last 10 years with the appropriate technology theory.This dissertation includes seven chapters except for the first one——the introduction.Chapter Two is a review about those studies related to the appropriate technology theory. Firstly, this chapter decomposes the view of appropriate technology into three stages from dimension of time——the neoclassical view of appropriate technology, the view of intermediate technology and the modern view of appropriate technology, and reviews their meanings concisely. Then, after having introduced the origin of localized technological change (the micro-foundation of the appropriate technology theory), based on the bounded rationality, the induced technological change theory, the economics of learning and knowledge, and the economics of irreversibility, this chapter looks into the intrinsic mechanisms of localized technological change. Finally, after having reviewed those existent studies on appropriate technology and economic growth, this chapter points out that the appropriate technology theory is applicable for analyzing regional economic disparity within a country. Because not only"dual economy"phenomenon exists there widely, but also there are differences between each region in such aspects as resource endowment, economic development level, institutional environment and technological capability; all of the factors mentioned above make those advanced technologies produced by relative developed regions not necessarily appropriate to those less developed ones'economic development, which will lead to diverse regional economic development inevitably.Chapter Three outlines a survey about the regional economic disparity of China with statistical index approach, convergence regression approach and distribution dynamic approach. The main results are below: since from the reform and opening-up of China, along with their fast economic growth, the aggregate economic disparity among all her provinces has experienced a V-type evolution route, and its turning point is around 1990; there has been formed three convergence clubs which are the east region, the central one and the west one, but the aggregate economic disparity among them has been in the widening course, and it has substituted for the inner provincial disparity of the east region as the leading role in the aggregate regional disparity; the inner provincial disparity of the east region is larger than that of the central one or the west one all the time.Chapter Four introduces an economic growth accounting approach based on inter-temporal data envelopment analysis, and Chapter Five applies it. This approach not only needn't assume a specific form of production function or neutral technological change, but also takes into account inefficient production activity. So, this approach decomposes the sources of economic growth into three parts, namely, factors input (movements along the frontier), technological change (shifts in the production frontier) and efficiency change (movements toward or away from the frontier). Therein, factors input can be decomposed into two parts further, namely, capital deepening and human capital accumulating, and efficiency change includes scale efficiency change and pure technological efficiency change. In addition, compared with those economic growth accounting approaches estimating production frontier with temporal data, this approach not only avoids drawing an unsatisfied conclusion like technological regress, but also reduces the extent to mix technological change up with technological efficiency improvement. The economic growth accounting of China's provinces between 1990 and 2004 finds some results like the following: no matter whether human capital was introduced or not, there were technological inefficiencies in most provinces'economic activity which were pure technological inefficiencies or scale technological inefficiencies; technological change, capital deepening and human capital accumulating all promoted labor productivity, but technological efficiency change played a negative role during these years as a whole; the descending order of provincial difference of labor productivities'changes brought out by each factor was technological change, capital deepening, technological efficiency change and human capital accumulating; each province's pure technological efficiency change or scale efficiency change not only had different size, but also different evolution route.Chapters Six and Seven explain the regional economic disparity of China empirically based on the appropriate technology theory. Firstly, this part discusses the sources of the regional disparity evolution of China between 1990 and 2004, with recourse to inter-temporal data envelopment analysis,βconvergence test and labor productivities'disparity analysis from a counterfactual perspective. Then, this part constructs a model of technological catching up based on technological capability after integrating some existent studies, and gives an empirical study taking each province's economic development experience during this period as the sample. As a result, it show as follows: there was localized technological change in China during this period obviously, its provincial difference dominated in the course of widening regional economic disparity, and the provincial difference of technological efficiencies'change played a positive role in this course too; the provincial difference of human capital accumulating accelerated the widening regional disparity, but its relative contribution was less than that of the provincial difference of technological efficiency, while the provincial difference of capital deepening restrained the widening disparity obviously; The technological catching up is realized on the basis that those less developed regions hold some technological capabilities, besides some capabilities of technological innovation like technological stock and R&D input, which includes some capabilities of technological absorption, such as the level and structure of human capital, the status of infrastructure, the consciousness of opening and the extent of proximity to those developed regions. Obviously, we can explain the regional economic disparity of China during this period under the appropriate technology theory.After summarizing the main results of the dissertation, Chapter Eight proposes some related policy recommendations and gives some simple research prospects as the following. In order to coordinate China's regional economic development, those less developed regions should strengthen factor input, promotes technological capability building and choose appropriate technology; the future research should extend analysis period, analyze in county-level or different industry perspective, take into account institution, culture, policy and disguised unemployment, discuss factors which affect technological efficiencies'change, technological change, capital deepening and human capital accumulating, and have a corresponding study based on adjusted data.