A Study On The Impact Of Economic Freedom On Economic Growth Through The Path Of Innovation

China's rapid economic growth over 30 years has ended,nowadays,the focus of economic development has transferred from the volume expansion to the ascension of quality,the engine of long-term development has altered from the outside to inside.During the state of economic new normal,China proposals grassroots innovation as a new engine for economic development.The third plenary session of the 18 th central committee of the CPC put forward to establish and perfect market economy system and to expand economic freedom of economic subject.Innovation and market are two major leverages to improve the quality of economic development.Besides,as the soul of market economic system,economic freedom is essential to the start of innovation,expanding economic freedom is the strategic and important point to realize the innovation driven development strategy.In this context,the study of the relationship between economic freedom,innovation and economic growth is of great practical significance.In this paper,we first define the concept of economic freedom and innovation.From three aspects,we summarize and comment on the relevant research at home and aboard on the relationship between economic freedom and innovation,economic freedom and growth,innovation and growth.then based on the theory of liberal economics,the article analyzes the dual conduction mechanism of economic freedom promoting economic growth.They are:(1)Economic freedom through three possible changes in the promotion of innovation: the birth of entrepreneurship,reducing transaction costs and improving the level of human capital,innovation promote economic growth;(2)Economic freedom by improving resource allocation efficiency and then promote economic growth.Based on the above theoretical analysis,we put forward four economic hypotheses.While analyzing the states quo of economic freedom innovation activities and economic growth,we contrast the world's two largest economic freedom evaluation systems,which come from Fraser Institute and The Heritage Foundation.Finally,the economic freedom data published by the Fraser Institute of Canada is selected.We use GDP growth as the index of economic growth.And then we describe the development trend of global economic freedom,innovation activities and economic growth and their respective characteristics.In quantitative analysis,this paper takes the international panel data of 80 countries (regions) in 2000-2012 as sample,firstly,we use the classical linear regression model,empirically tests the promoting effect of economic freedom on innovation.In addition,we testify this result through robustness test.Subsequently,in the empirical analysis of the impact of economic freedom on growth through innovation,this paper introduced the economic variables and the innovation variables into classical growth regression model based on steady state by two steps.The system generalized moment estimation(SYS-GMM)was used to analyze the impact of economic freedom on economic growth;economic freedom and innovation on economic growth.First,we prove that the economic freedom is significant to economic growth,and then the intermediary role of the innovation variable,that is,economic freedom can promote economic growth by promoting innovation.The selection of measurement method can effectively solve the problem of the endogenous in the model,and the robust test results verify the reliability of the empirical conclusions.Finally,on the basis of analysis on the theoretical framework and empirical results,numbered policy recommendations are put forward for the next round of economic reform in China.Including the establishment of the market mechanism,to limit the power of government;to perfect the legal system and so forth.