The Direction Of Technical Change And Analysis On Its Contributing Factors In China

As be the one of the main source of economic growth, technical change has beenthe enduring themes of the economics. However, existing research mainly concern theHicks neutral technical progress, ignoring the bias of technical change. Theoreticalresearch and countries’development experience support the basic facts of exist ofbiased technical change. Biased technical change reflects the dynamic trend of therelative factor returns, and has a direct impact on the distribution of national incomebetween capital and labor and thus has serious important significance on the firstdistribution of income. Therefore, my paper will estimate the level of biased technicalchange during 1978 to 2010 in China, and try to analyze its possible causes.The paper is divided into five chapters, the basic structure as follows: The firstchapter introduces the relevant literature review. The second chapter builds amathematical model to analyze the endogenous process of biased technical change. Inthe third chapter, I first construct the index of biased technical change and ensureexist of biased technical change, and then estimate the factor augment of CESproduction function, VES production function, CEEDx production function andCEEDk of the production function through normalized supply-side system andchoose the best aggregate function, then estimate international and provincial biaslevel of technical change. In chapter IV, we use provincial panel data to investigatethe possible causes of biased technical change. The fifth chapter contains summaryand related discussion.The paper found that: (a) mathematical model shows that the relative factorinputs, R&D efficiency can affect the bias of technical change. (b) The developmentexperience in China during 1978 to 2010 does not support the hypothesis of neutraltechnical change, that’s to say, the elasticity of capital-labor substitution is approximately from 0.59 to 0.78. Besides in 1978 to 1982, and 2007 to 2009, bias oftechnical change in China tend to capital, and tend to the process of capital. Theprovincial technological advances are almost always tends to capital, but there is aconsiderable difference in all provinces. However, the bias of technical change tendsto be similar in the same district, i.e. the eastern, the central, the west and the northern.(c) The result of panel regression analysis showed that human capital, marketstructure, TFP, and infrastructure construction, the per capita income have positivecorrelation on the bias of technical change, while total imports and exports per GDPhas negative impact on it. Further more, human capital and TFP take very significantpositive impact, which shows that the bias of technical progress may depend on theexisting technical change and the level of human capital.My biased technical change index can accurately portray the definition of Hicks.The paper is first to normalize the VES production function and CEED productionfunction, and use normalized supply-side system method to estimatefactor-augmenting CES production function, VES production function, as well as theCEED production function. In addition, from the grasp of the literature point of view,this paper is first to empirical study the causes of biased technical change.