Probe Into The Impact Of Domestic R&D On Economic Growth In Opening Conditions

Since the open policy carried out in late 1970s, the national economy has experienced a high-speed growth phase. But the growth largely depends on the waste of energy sources. To improve the quality of growth, we must advance the innovation and technology progress. R&D is the key of technology progress. In opening conditions, the increase of technical deposit comes from both domestic R&D and international R&D spillovers. And the international R&D spillovers mainly come from two channels: foreign direct investment (FDI), and international trade. How do international R&D spillovers affect the mechanism that domestic R&D promotes economic growth in opening conditions? Which channel does the impact mainly come from? Is this impact good for domestic R&D or crowd out domestic R&D? Those are what we will discuss in this paper. Besides, the Growth Theory insists that, as the market in developing countries is incomplete, the government participation leads the economic development. It's especially the same in R&D fields because of the externalities of R&D. So we analyse R&D policies in developed countries. And these historical experiences guide us to optimize our R&D policy, so that we can promote technology progress and economic growth. We firstly deduce from two R&D based growth models and a technology progress model in which FDI is endogenous, and establish a model of how does domestic R&D promote economic growth in opening conditions. Then we do some demonstration analyses based on this model. We analyse the impact of domestic R&D on economic growth in opening conditions, using Granger cause-and-effect proof-test and Co-integration analysis. The conclusion is: domestic R&D is the major source of technology progress in our country. FDI is the most important source for our country to obtain international R&D spillovers, and FDI also promotes domestic R&D. At last, we analyse R&D policies in the U.S.A and Japan. Technology progress modes in these two countries are different. But they both have advanced their technology progress successfully. Their experiences are representative and can guide us to constitute R&D policy. According to the conclusion of international experience analysis and demonstration analysis, we give policy advices on how to promote economic growth through R&D.