Knowledge Spillovers, Spatial Dependence, And Regional Economic Growth In China Provincial Areas

While traditional economic growth theory has always focused on processes unfolding in time dimensionality, the analysis of knowledge spillovers by the new economic growth theory therefore also implies an interest in processes that are unfolding in space dimensionality: patterns of knowledge diffusion, knowledge diffusion features as well as geographical factors of knowledge spillovers are used to explain regional gaps in economic growth.In this paper, according to the theory of endogenous economic growth, circular and cumulative causation and technology gaps, the author uses panel-data and spatial econometric model to analyze knowledge spillovers, spatial dependence and its effect on economic growth of China provincial areas, and to present a theoretical and empirical study in its contributions to regional economy in our country.It is hoped that this research will be of some value to the development of theory economy.Also, this research is expected to have a great practical significance in stimulating regional economy growth by applying the knowledge spillovers effect. In addition, it is also expected that the research would provide some important empirical evidences to endogenous growth theory.The main purpose of this research is to investigate three basic issues central to the explanation of knowledge spillovers and regional economic growth:(1)the spatial distribution of innovative activity across China regions, (2) agglomeration economies and the geography of innovative activity, and (3)spatial dependence and regional economic growth.The study in this paper mainly contributes in the following items.Firstly, this paper establishes a basis of the analysis, provides a concise literature review, and lists the problematic issues in the existing literature.Based on this, the research method, the paper primary coverage and the reasons for selecting the issues to study are given. Domestic and foreign researches generally ignored geographical spatial effect on the economic growth and lacked study for spatial dimensions.This research's logical beginning is the geography spatial effects of the provincial regional economic growth.This research takes provincial region as research spatial scale, and theoretical underpinnings on the role of knowledge externalities and increasing returns in the process of economic growth are summarized.Theoretically, assuming heterogeneity and space correlation, the theoretical framework is constructed based on the geographical knowledge spillover effects;in the methods aspect, classical statistics, spatial statistics and spatial econometric are employed;in analysis essential factors aspect, knowledge externalities and innovation will be introduced to the provincial regional economic growth convergence model.Secondly,the study provides the rationale for employing spatial econometric methods in this research, both from a theoretical context of geographic knowledge spillovers and from a methodological concern for spatial data. There is the complex space interaction and the spatial interdependence structure problem among the spatial samples, which will induce bias when using the classical econometrics model to carry out the regression analyzing, therefore spatial econometrics methods in analysis spatial sampled data have an advantage over the classical econometrics methods.The spatial econometric methods have such features;it has a series of technologies to be able to process the problem that "the method" relates with "the theory" of the spatial effect.Therefore, the spatial econometric analysis is not only used to process the spatial data, but also to explain and test the concept for the theory of the knowledge spillovers, economics of agglomeration and the spatial externalities.Thirdly, the study is devoted to an exploratory spatial data analysis in order to better assess differences in the spatial distribution of innovative activity across China's provincial areas.The analysis of provincial region innovative intensity provides strong evidence of positive spatial autocorrelation for the period of 1996-2005.In this part, we used the patent data as a measure of innovative output to research on the spatial distribution and dependence of 31 China's mainland provincial regions by spatial econometrics analysis. Visible patent distribution plot has shown the innovation output distribution of China's province level and spatial dynamic change.Location Gini coefficient and Moran's I index have pointed out that innovation activity of China's province level is not randomly distributed, but presents different layer of innovation cluster, and spatial dependence. Moran scatter plot indicates the spatial dependent pattern of innovation activity for each province region.These results will benefit every province to find the trail of their innovative change, and to understand the geography trait influence of region innovative ability and difference, so as to make better strategy for region innovation development.Fourthly, the impact of geographic knowledge spillovers on provincial innovative activity is discussed.The main result is that innovative activity in a provincial area is positively affected by both specialization and diversity externalities in high technology industries, that is to say, the innovative activity in provincial area is positively affected by both MAR's spillovers and Jacobs'spillovers, but the innovative activity in provincial area is not significantly affected by the local competition;that the innovative activity is mainly affected by diversity in high technology industries,followed by the specialization;the innovative output in provincial area is positively affected by the human capital.The spatial econometric analysis shows that geographic knowledge spillovers exist across provincial boundaries and high technology specialization externalities are more localized than high technology diversity externalities, and find the potential mechanism of the knowledge spatial diffusion in a provincial area. At the same time, there are the knowledge externalities across the provincial region geography boundary, which implies that the innovative activities in a provincial area are not only affected by local knowledge spillovers but also by the knowledge spillovers of the contiguity provincial areas.Fifthly, this research examines the extent to which provincial economic growth is related to the three different channels of knowledge externalities in high technology industries. The conclusion is that high technology diversity has a positive and significant effect on provincial economic growth and innovative gaps variable(IGAP)has a negative and high significant (p=0.001)effect on provincial per capita GDP growth, which disagree with the view that innovative gaps induce region economic fast growth, and there is not catch up effect. However, there are no substantive spillover effects of the three different channels of knowledge spillovers that flow across provincial boundaries. From the convergence point of view, the result does not find significant evidence of absolute convergence for the period of 1996-2005.However, after controlling the structural characteristics determining provincial economic growth, significant evidence of convergence for the period is found.Classics OLS and synthesis spatial econometric model are used in estimating economic growth convergence and the results are basically the same. There is an evidence of conditional convergence in China's provincial economic growth.In comparison, another finding is that the estimated convergence rate of panel data is higher than that estimated using cross-sectional data, implying the possible bias with the cross-sectional data estimation, also showing that it is necessary to considering the spatial factors and geography spillover effect, the spatial econometric model is a more desirable convergence model and the estimated results are robust.Lastly, this research concludes with a summary of key findings and concluding remarks and explores the implications for regional policy, and presents prospect of discussing the hot issues in the study of knowledge spillovers and regional economy growth.