Research on the Impact of Regional Innovation Capacity on Total Factor Productivity Improvement

Abstract

In the Party's 20th annual report, it clearly states that we must focus on improving total factor productivity as an important means to promote economic development. Enhancing regional innovation capability is crucially important for increasing total factor productivity. This article selects data from 30 provinces in China over the 11-year period from 2012 to 2022 as a case study, employing various econometric methods to verify the expected theory and explore the impact of regional innovation capability on total factor productivity. The study shows that: Initially, enhancing regional innovation capability significantly boosts total factor productivity at the regional level, and this finding holds true across a range of robustness checks. second, high regional innovation capacity can promote the improvement of human capital level and urbanization level, and then indirectly promote the improvement of regional total factor productivity. Thus, enhancing regional innovation capabilities serves as a vital approach to driving high-quality economic growth and ensuring continuous gains in total factor productivity.