China's regional innovation capacity in transition: An empirical approach

Drawing upon regional innovation system literature, this paper estimates a stochastic frontier model to explain the increasing disparity in innovation performance between Chinese regions. The estimated results show that government support, the constitution of the R&D performers, and the regional industry-specific innovation environment are significant determinants of innovation efficiency. Due to the large difference in the firms’ innovation performance across the regions, when regional innovation modes are transformed from university and research institute dominant to firm dominant, the overall innovation efficiency between regions becomes more and more disparate, which actually underlies the widening gap in regional innovation performance.