Chinese Innovation: An Empirical Study of Chinese Innovation Creation

Abstract: China’s economy has for more than 30 years experienced constant rapid growth. The growth miracle has largely been attributed to export, but in recent years the growth strategy has been changed. The new ambition is to go from “Made in China” to “Innovated in China”. This study investigates the input channels that create innovation in China, and panel data analysis is used to analyse which factors create innovation. The result shows a positive significant relationship between innovation and research and development expenditures. Also foreign direct investments have a positive relationship with innovation. The study also contributes with a result that questions the optimal way of measuring innovation.