The Effect Of Factor Price Distortion On Direction Of Technical Progress In China

Based on the appropriate technology theory,the direction of a country's technological progress matches with its factor endowments can promote the long-term economic growth.For the one-sided pursuit of short-term GDP growth,over the years,the local government have the power to control and distribution the key elements of the pricing,which makes the price of factors non-maket.Factor price distortion in reducing the production cost and promoting the economy rapid growth in the short term at the same time,makes the production factor inputs are contrary to the factor endowments,thus affecting the technology selection and long-term economic growth.Based on the above situation,considering the factor price distortion on the direction of technological progress effect,has important practical significance,especially for China which "demographic dividend" gradually disappearring,capital deepening and factor endowment types occur gradually changing.China as a post-development country,independent R&D and technology introduction are the main ways of technological progress.Therefore,this paper study the relationship between factor price distortion and technological progress direction from the independent R&D and from three technology import channels which are import trade,FDI and the international patent citation.Secondly,measure the price distortion and technical progress index of the typical state of the country,and then make a statistical analysis of them.Thirdly,use of China provincial panel data from 1998 to 2013 years to measure the elements of price distortion degree and direction of technological progress index,found that Chinese capital price distortions was significantly greater than that of labor distortions,the direction of technical progress partial capital and factor price distortion had a negative correlation with capital-biased technology progress.Finally,have empirical tests for factor price distortion and the direction of China's technology progress.The results showed that the overall effect of factor price distortion is negative,through the effect independent R&D,import trade and the technology spillover of FDI on capital-biased technology was inhibited,only through international patent reference to promote the capital-biased technological progress.And by variable coefficient model estimates showed that there exists a significant regional heterogeneity factor price distortion effects.Further,the effect of factor price distortion on capital-biased technology progress effects exist significant threshold characteristics,only when the capital of distortion less than 2.254,in inhibitory effect of minimum on the capital of bias technology progress.This study provides an empirical basis for the comprehensive understanding of the role of factor price distortion in the direction of technological progress,but also provides decision-making reference for how to achieve long-term economic growth.