A Study Of The Impact Of International Trade And Institutional Factors On Technological Innovation In China

Over the past few years, many problems such as excessive consumption of resources, serious environmental pollution, economic structural imbalances etc. are become more and more serious in China, factor and investment-driven growth model is unsustainable. In order to achieve sustainable development, we must accelerate the transition to innovation-driven growth model, rely on technological innovation to promote economic development. Technological innovation require good institutional arrangements, but China still has not completed the accumulation of corresponding institution, we must make up the "institution gap" through institutional innovation as quickly as possible. Furthermore, international trade can exert important influence on a nation's technological innovation, especially for a big country in terms of high external dependence such as China. Therefore, this thesis research from both internal and external perspective, explore two key factors of technological innovation—institution and international trade, strive to find out the obstacles in current institutional arrangements and trade patterns, in order to put forward reasonable proposals.We carried out empirical research by employ panel data of 30 regions in China from 1999 to 2008 and found that: imports and foreign direct investment has promoted China's technological progress, the increase of state-owned economy proportion and the deterioration of income distribution has significantly hindered technological progress in china, the effect of export on technical progress was gradually turn from positive to negative over the past few years.This paper argues that China must achieve a breakthrough in institutional innovation and adjust its foreign trade pattern before made significant progress in technological innovation. We must unswervingly push market-oriented reforms forward, to release the great potential of China's economy fully by use the strength of free market; Accelerate the transformation of the government, improve the balancing mechanism and the supervision mechanism of power, clear the government's rights and responsibilities, reduce administrative costs, improve the efficiency of public services; Accelerate the reform of the existing income distribution system, focus on "just", taking "equality" into account, emphasize "just" in the initial distribution to achieve Pareto optimal, emphasize "equality" In the secondary distribution in order to maximize the social utility; Accelerate the improvement of basic social security system to expanding domestic demand, and improve the efficiency of investment to reduce the high dependence on exports.