Impact of investment and technology stock on total production: An empirical study of 35 cities in China

Abstract

In order to evaluate the impact of investment and technology stock on total production, a panel date model is used in this paper. By introducing investment in fixed assets as investment's proxy, estimation of the number of in-force issued patents from 30 provincial capitals and 5 cities specially designated in the state plan as technology stock's proxy, the paper model can solve the problem of parameter quantification. Empirical results show that the investment and technology stock have positive impact on the total production, that the elasticity coefficient of investment is more than that of technology stock, that the total factor productivity(TFP) of the western cities is less than that of eastern coastal cities. Not only investment in fixed assets and innovation should be increased, but also the total factor productivity should be be increased in the process of Western Development.