What determines misallocation in innovation? A study of regional innovation in China
Hao-Chung Li (),
Wen-Chieh Lee and
Bo-Ting Ko
Journal of Macroeconomics, 2017, vol. 52, issue C, 221-237
Abstract:
This paper sounds an alarm about disparate efficiencies among China's regions in the allocation of innovation inputs. A theoretical measure of misallocation is adopted to gauge the distortions that exacerbate the inefficiency of resource allocations across geographic innovation units; these units’ usage of innovative inputs reveals the level of misallocations prevalent within the Chinese economy. The measure of innovation misallocation is computed by utilizing a micro dataset based on information from the China Statistical Yearbook for Science and Technology (CSYST) from 1999 to 2012. In addition, this paper probes the factors that co-move with China's innovation resource misallocations. We find that, although an advanced financial market is beneficial to innovation efficiency in China, both the government's extensive development of transportation infrastructure and the preferential treatment given to state-owned enterprises (SOEs) and foreign-invested enterprises (FIEs) negatively correlate with innovation efficiency. We conclude that emerging economies that are experiencing R&D input expansion, such as China, should be cautious in ensuring efficient resource allocations.
Keywords: Resource misallocation; Innovation efficiency; Financial market; Infrastructure investment; Preferential treatment (search for similar items in EconPapers)
JEL-codes: O11 O32 O47 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164070417301489
Full text for ScienceDirect subscribers only
Related works:
Working Paper: What determines misallocation in innovation? A study of regional innovation in China (2016) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:52:y:2017:i:c:p:221-237
DOI: 10.1016/j.jmacro.2017.04.005
Access Statistics for this article
Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos
More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().