UNDERSTANDING THE REGIONAL INNOVATION CAPACITY IN CHINA AFTER ECONOMIC REFORMS

Our study aims to examine the drivers of China's regional innovation capacity (RIC). Drawing from innovation system literatures, our study proposes that RIC can be determined by (a) innovation actors (higher education institutions, enterprises, and public research institutes); (b) innovation inputs (financial capital and human resource), and (c) international interactions. The main finding was the significant impact of higher education institutions demonstrating higher education institutions are crucial innovation actors. The interaction effect also found between foreign direct investment (FDI) and Science and Technology (S&T) investment suggests governments should pay more attention to the indirect impact of drivers in building RIC in China.