The Influence Of Innovation Towards Economic Growth In China: Evidence From The Ardl Model
Tayyab Khan
Wuhan University of Technology
Long Wei
School of Economics, Wuhan University of Technology
Ayesha Khan
School of Economics, Wuhan University of Technology
Abstract
This study investigates the causal association between innovation and economic growth in China from 1993 to 2019. Using the Autoregressive Distributed Lag Model (ARDL) and Error Correction Model (ECM) both found long run, positive and significant association with economic growth. This study also found a positive short run relationship between Trademarks applications, R&D expenditure, Scientific & technical journal articles, and Patent applications with economic growth. Using the Average Impact Index Model, the Trademark application was found to be the most impactful indicator of innovation to the economic growth in China during the given period, if we increase one percent of a trademark’s application, it can have enhanced 52% economic growth in China. The Error correction term ECT (-1) satisfied both conditions: the coefficient was found negative (-1.8311) and significant (0.0003) at the 5% level. While the speed of adjustment has recorded 183% to the long-run equilibrium. Like China’s economic reform, Government should launch a vision to reform transitioning from “Made in China” to Innovated in China. To improve and enhance economic growth more through innovation. it is strongly recommended for one’s economic growth policy because the distribution and inconsistency in innovation capability can affect regional economic growth in China.
Author Biographies
Tayyab Khan, Wuhan University of Technology
I am an International student of Prof. Weilong at the school of economics, Wuhan University of Technology
Long Wei, School of Economics, Wuhan University of Technology
He is a Full Professor and Dean of the school of economics, at the Wuhan University of Technology.
Ayesha Khan, School of Economics, Wuhan University of Technology
She is an international student at the School of Economics, Wuhan University of Technology.