Abstract
China is facing challenges to sustainable economic growth. Higher education of Chinese residents can affect total factor productivity (TFP) growth and hence has an influence on economic sustainability. However, currently, there is limited literature on the nexus between higher education and TFP in China. Therefore, this paper empirically analyzes the heterogeneous and spatial effect of higher education on the regional TFP growth using a dynamic spatial econometric model with provincial panel data from 2003 to 2016. The results indicate that different levels of higher education have significant effects on TFP growth and are mainly reflected in the spatial spillover effect. Bachelor and doctoral education (particularly doctoral education) demonstrated significant positive effects, whereas the technical school and master education had significant negative effects. When decomposing this effect into technical efficiency and technical progress to explore the mechanism of influences, the latter plays the major role. Therefore, the Chinese government can promote TFP growth and economic sustainability by expanding the scale of bachelor and doctoral education and improving the quality of technical and master education.
Highlights
China’s economy has experienced a long period of double-digit growth since the 1990s, China is facing numerous challenges to sustainable economic growth
This paper explores the effect of higher education on total factor productivity (TFP) growth using a dynamic spatial econometric method with panel data from 2003 to 2016 in China
We display static and dynamic versions of the model specifications; the latter includes the TFP growth indicator lagged in time
Summary
China’s economy has experienced a long period of double-digit growth since the 1990s, China is facing numerous challenges to sustainable economic growth. Improving total factor productivity (TFP), which is a measurement of the output efficiency of all production factors, can solve the sustainability question for the reason that TFP growth can promote economic growth continuously and steadily without additional resources input [2,3]. Higher education, which provides training of critical thinking, technological skills, and literacy, would cultivate educated workers to implement tasks more efficiently and improve a country’s TFP and sustainable economic growth [4]. Exploring the nexus between higher education and TFP growth deserves more attention. It is an important area of research, and a matter of considerable interest to policymakers
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