Chinese innovation-driving factors: regional structure, innovation effect, and economic development—empirical research based on panel data

Abstract

The implementation of innovation-driven strategy is of great significance. Analysis of the driving factors of innovation performance from quantitative and systematic perspectives is needed for policy making. By drawing upon the LMDI model, this study identifies the driving factors and their corresponding contributions in the innovation performance of 30 Chinese provincial-level regions during the period 2000–2012. The innovation performance is decomposed into the regional economic structure effect, R&D intensity effect, innovation efficiency effect, and economic development effect according to the driving mechanism. The results indicate that the third effect in this list, innovation efficiency, contributes the most to innovation performance at 54.28%, followed by the regional R&D intensity at 27.49%, and China’s economic development at 19.92%. The effect of the regional economic structure is negative, at −1.69%. This study further analyzes four major economic areas of China and identifies the channels through which each area conducts their innovation activities. The empirical findings provide information for policy measures to implement innovation-driven strategies.