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The impact of R&D efficiency on economic growth in China: non-linear threshold effects

    Chang-Sheng Liao   Affiliation
    ; Xinyan Li   Affiliation

Abstract

This study uses a threshold estimation technique to examine whether the effect of R&D efficiency on economic growth in China differs according to the level of financial development. The results broadly confirm a nonlinear relationship between R&D efficiency and economic growth due to the dynamic and static threshold effects of financial development and R&D expenditure. This finding suggests that R&D efficiency does not significantly impact growth in the low and middle-financial development provinces at conventional levels. Hence, the benefit of R&D efficiency in China could stem from the positive effect of R&D in highly financially developed provinces. Though R&D efficiency is poor, R&D investment still enhances economic growth because the amount of R&D investment is enormous. This finding suggests that while it is most important to not unthinkingly expand R&D gross investment, it is also necessary to make full use of R&D investment by improving R&D efficiency.


First published online 29 May 2024

Keyword : R&D efficiency, R&D investment, economic growth, SBM-DEA model, panel threshold model, dynamic panel threshold model

How to Cite
Liao, C.-S., & Li, X. (2024). The impact of R&D efficiency on economic growth in China: non-linear threshold effects. Technological and Economic Development of Economy, 30(5), 1205–1228. https://doi.org/10.3846/tede.2024.20166
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Jul 9, 2024
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