No Simple Relationship between Technological Improvements and Employment Generation in a Large Developing Country like China: Thoughts Stimulated by Sjöholm and Lundin

Changwen Zhao
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Changwen Zhao: School of Business Management, Sichuan University, No. 29 Wangjiang Road, Chengdu, Sichuan Province, China, 610064.

Asian Economic Papers, 2010, vol. 9, issue 2, 35-43

Abstract: Fredrik Sjöholm and Nannan Lundin (this issue) have found that China's science and technology (S&T) activities had no effect on employment growth. I disagree with their conclusion and attribute it to the neglect of important factors like the S&T upgrading by small firms, the spillover effects from S&T activities, differences across industries, and differences in the stage of economic development. I used macroeconomic and cross-regional data in China to estimate the effect of technology development on job creation and found that technology innovation did have a positive impact on employment in the eastern region of China. This suggests that a positive relationship between technological improvement and employment creation is reliably seen only after the economy has reached a middle-level of economic development. (c) 2010 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

Date: 2010
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