Enhancement Of China Innovation Capability: From Technological Diffusion To Demand Pull

Abstract:From 1979 to 2007,the average annual growth rate of GDP is 9.8%,and that of total volume value of imports and exports is 17.4%.From 1991 to 2007,the annual foreign investment in actually use grows by 19.8%.,the annual R＆D expenditure from 2001 to 2007 grows by 22.5%. However,the annual growth rate of technological progress from 1985 to 2007 is -0.089%.These are not consistent with the theories of demand pull innovation and international technological diffusion.So why did the large-scale innovation not appear in China? The paper mainly analyses this question from the supply and demand sides of innovation,including the analyses of some impacts on the efficiency of innovation variables.By using the varying parameters state space model,we study the innovation in a dynamic mechanism.The results show that China's innovation mainly depends on the domestic R＆D inputs,while the effect of international technological diffusion is little,or even negative.The effects of FDI,imports and patent application by foreign countries are possitive, negative and negative respectively.And annual per capita disposable income,living expenditure, government procurement and export have positive effects on China's innovation,while the effect of the income gap changes from positive to negative.