The Effect Of Various R&D To Chinese Manufacturing Industry: Based On Malmquist Index Analysis

The researchers and scholars all over the world are concerning about Chinese fast growing economy and its continuity. Total factor productivity which works as the important role to propel Chinese economy development is seriously paid attention on. In the most of impact factors, science and technology activities especially function of R&D is the main influential point. Among current fast growing economy entities, science and technology activities, which are raising fast in China, work as the driving force of economy and social development, and also the support of economic structure promotion. After the strategy of strengthening the country's innovative capability through research being established, R&D expenditures rise up quickly and the input intensity become much higher, as well as the effect of R&D on economic development becomes more significant.Continuous growth of economy depends on the improvement of technical efficiency and technical progress. Using non-parameter Malmquist productivity method, we could decompose TFP into two factors as technical efficiency and technical progress, which could provide us a new way to study the core issue of Chinese economy development. This paper analyses the mechanism of how R&D contribute to economic development, technical progress and technical efficiency of industry. At the same time we calculate the effect of R&D and TFP on economic development quantitatively according to detailed data by building model, and give advice on how to improve the efficiency of R&D in industry.In this paper the total factor productivity, technical efficiency and technical progress are measured by the Malmquist Productivity Index based on the DEA. As the result of tests on several productivity indexes, the values grow with the R&D investment in the whole manufacturing industry. We especially study on the relationship between various R&D investments and several indexes. We find that R&D invested by corporations themselves influence technical progress mostly. Although the public R&D investment has an effect of lagging, it plays an important role on technical progress and TFP of High-tech industry. The industries could not absorb the advanced technology embodied in foreigner investment corporations because of low absorptive capacity, while the foreigner investments are just prompting the manufacturing and assembling.