China's Regional Inequality in Innovation Capability, 1995-2006

Abstract

This paper assesses both interregional and intraregional innovation inequality in China from 1995 to 2006. It is revealed that the east-central-west inequality has increased over time, whereas the inter-provincial inequality showed a V-pattern until 2003; Both inequality measures oscillated from 2004 to 2006. Using a decomposition framework recently developed by one of the authors, we determined that the major factors driving innovation inequality are population, economic development level, R&D, location and openness. The aggravated innovation inequality reflects the growth of China's innovation centers in the eastern region and their admission into the global innovation networks. The fact that R&D is a major factor driving the inequality suggests that, considered in the present study, the efficiency of R&D investment improved in certian regions during the period (1995-2006). Finally, geographic location and openness affect innovation inequality primarily through the coupled evolution of innovation capability and economic development, resulting in first-mover advantages to provinces of the eastern region. © 2012 The Authors China & World Economy © 2012 Institute of World Economics and Politics, Chinese Academy of Social Sciences.