Study On The Estimation Of Intangible Capital Stock And Its Economic Growth Effect In China

The report of the 20th Party Congress proposed that high-quality development is the primary task of building a modern socialist country in all aspects.China’s economic development has entered a critical period of transformation of old and new dynamics and supply-side structural reform,and the way of relying mainly on factor inputs such as labor and tangible capital to drive economic growth is unsustainable,and it is urgent to seek new dynamics to promote the economy to achieve quality and quantity growth.Empirical evidence from developed countries shows that intangible capital,including R&D capital,information technology capital,structural capital,human capital and organizational capital,is the foundation of modern economic development,the key factor of innovation-driven economic development,and the main driving force of national economic growth.However,because intangible capital has no physical form,it is more difficult to define and measure,which leads to the fact that China still lacks scientific classification and accurate statistics of intangible capital,and the relationship between intangible capital and economic growth is not yet clear.Therefore,this paper measures the flow and stock of intangible capital in China over the years,and analyzes the results to explore the impact of intangible capital on economic growth,and analyze the ability of intangible capital to drive economic growth,with the hope that this can provide a reference for the implementation of China’s economic quality development strategy.This paper follows the basic idea of measuring the basic data first and then doing the empirical analysis.In the first part,we define the concept and connotation of intangible capital and its related components,and point out that intangible capital is the key to innovation-driven development and an important factor to improve productivity,which is important to promote economic growth.Second,the national scale of intangible capital investment in China from 1995-2018 is accounted for based on the expanded CHS framework,showing the long-term trend of intangible capital investment scale.Again,the estimation process of provincial intangible capital stock in China from 2001-2017 is elaborated,including the data processing of current investment flows of computerized information technology capital,innovation capital and enterprise competitiveness capital,parameter setting and the selection of capital accumulation methods,etc.The estimation results are analyzed by an econometric model to further clarify the heterogeneity of economic growth attributes of different types of intangible capital stock.Finally,we estimate the intangible capital flows of cities based on the provincial intangible capital stock estimation data combined with city-related indicators,and further use the perpetual inventory method to estimate the intangible capital stock of cities and analyze the estimation results.In the second part,the relationship between intangible capital and economic growth is studied from two perspectives.First,the relationship between software capital stock and scientific R&D capital stock and economic growth is investigated through two quasi-natural experiments,namely,the construction of "China Software City" and the pilot construction of "Innovative City",using the synthetic control method and the double difference model,respectively.The causal relationship between Second,we incorporate intangible capital stock into the Solow growth model,measure the contribution of intangible capital stock to China’s economic growth based on the results of time-varying factor output elasticity estimation,and analyze the variability of China’s economic growth dynamics and the variability of economic growth dynamics by region and by city cluster.The main conclusions of this study are as follows.First,the scale of intangible capital investment is increasing rapidly,but the structural changes are obvious.The scale of intangible capital investment in China has increased from 4% of GDP in 1995 to 15% in 2018.During the period of 1995-2018,the share of computerized information technology capital in China’s intangible capital has increased significantly;the share of scientific R&D capital in innovation capital has decreased,and the share of non-scientific R&D capital has shown obvious differentiated fluctuations;the share of firm-specific competitive ability capital in GDP has tended to decrease;the share of intangible cultural heritage protection investment in The share of GDP is relatively stable.Second,it is the software capital and scientific R&D capital among intangible capital that are the new driving forces of China’s economic growth and are the intangible capital estimated in this paper.The intangible capital stock estimated in this paper is characterized by a fast growth rate and uneven regional distribution.from 2001 to 2017,China’s national current-value intangible capital stock rose from 0.4 trillion yuan to 16.4 trillion yuan.The estimation results of intangible capital stock by province show that a few developed regions such as Beijing,Guangdong and Jiangsu have significantly higher intangible capital stock than other regions.in 2017,the capital stock of computer information technology in Beijing,Guangdong and Jiangsu provinces accounted for 26.78% of the national proportion,and the scientific R&D capital stock accounted for 34.91% of the national proportion.The city-based intangible capital stock estimation results show that the distribution of urban intangible capital stock shows an obvious spike-right bias characteristic,indicating that most cities have a small intangible capital stock.Further,the order 3 level 9 system proposed in this paper can well illustrate the distribution characteristics of intangible capital stock in cities in China.Third,the causal relationship between intangible capital and economic growth is verified.The quasi-natural experiment of "China Software City" and "Innovative City" pilot construction policy is used to study the causal relationship between intangible capital and economic growth for two types of intangible capital,software capital and scientific R&D capital.The results of the study show that the economic growth of China’s top software cities is generally faster than that of non-China’s top software cities with similar economic development,in which the development of software industry and the reduction of investment-driven dependence are the channels through which the construction of China’s top software cities promotes economic growth,and the development of software industry as a representative of intangible capital investment can become a new source of economic growth.The pilot policy of innovative cities can significantly boost the economic growth of pilot cities.The effect of the pilot policy is significantly heterogeneous,and the policy effect differs significantly among cities with different innovation bases.The innovative city pilot policy can significantly boost innovation investment in medium-sized cities only,which in turn drives economic growth through innovation investment.Fourth,intangible capital has become a new driving force of economic growth.the average annual contribution rate of intangible capital to economic growth from 2001 to 2017 is 51%.From different regions,the economic growth model driven by physical capital and labor in the east,central and western regions and the northeast has been completely changed,and intangible capital and total factor productivity have become the main drivers of current economic growth.Looking at different urban clusters,intangible capital has become the main driver of economic growth in China’s five major urban clusters.Looking at the timeline,intangible capital became the main driver of economic growth after the financial crisis from 2008-2014,with the contribution rate to economic growth rising rapidly from 29.0% in 2007 to 77.7% in 2014.the contribution rate of intangible capital to economic growth declined from 2015-2017,and the main reason for the decline was the bottoming out of the total factor productivity contribution rate.Sensitivity analysis shows that scientific measurement of software capital stock as well as scientific R&D capital stock is beneficial to avoid underestimation of the contribution of intangible capital to economic growth.Compared with existing studies,the main contributions of this paper are: first,finding heterogeneous effects of different types of intangible capital stock on economic growth,and proposing that software capital and scientific R&D capital among intangible capital are the new driving forces of China’s economic growth,which are the intangible capital estimated in this paper.Second,it improves the accuracy and scientificity of intangible capital stock measurement.Existing studies in measuring software capital stock take software business income directly as software investment is obviously inappropriate,this paper adjusts software business income to software investment based on provincial input-output table data.Compared with existing studies on intangible capital stock estimation,this paper incorporates useful improvements in recent studies on R&D capital stock estimation,and the estimation results are more scientific in comparison.Third,the spatial scale of intangible capital stock estimation is expanded.Based on the results of provincial intangible capital flow estimation and city data,this paper estimates urban intangible capital flow and further measures urban intangible capital stock by using the perpetual inventory method,which can be used to study the problems related to urban clusters and the evaluation of city-related pilot policies.Fourth,the causal relationship between intangible capital and economic growth is explored based on the two pilot policies of "China Software City" and "Innovative City".Fifth,the contribution of intangible capital stock to economic growth is measured based on time-varying factor elasticity,and the fact that the output elasticity of intangible capital stock has increased rapidly in recent years is identified to avoid the underestimation of the contribution of intangible capital stock to economic growth in recent years.