China's Manufacturing Innovation Efficiency: Decomposition And Drivers' Analysis

Although China's manufacturing output ranks the second in the world, it exists 'high growth, low innovation' dilemma in the long run. This paper studies listed manufacturing companies with the panel data, decomposes their innovation efficiency with Stochastic Frontier Analysis, and tests the hypotheses about the three innovation drivers. We have found that Chinese manufacture is low-efficiency and lack of innovation, since innovation investment is limited and there is regression trend naturally. What's worse, innovation makes less contribution to China's manufacture, of which rapid growth depends on scale expansion. While low technological efficiency accounts for increasing cost pressure so that technological innovation can not digest this kind of pressure. On the contrary, manufacturing companies with small scale and non-nationalized own more innovation but low-investment.