The Effects of Technological Innovation Investment and Output on Economic Growth

Under the highly globalized and competitive world economy conditions, science-technology and innovation oriented competitiveness strategy is the most important factor for countries not only to strengthen their global competitiveness but also to achieve sustainable long run growth. In this paper, the long term dynamic relationship between Chinese economic growth and technology innovation investment and output is analyzed by the variable stationary test and co-integration analysis, error correction, granger causality test and variance decomposition analysis. The results show that, there is a long-term stable equilibrium relationship between technology innovation investment and output and economic growth. Technology innovation investment has an effect on economic growth, but in the short term, the effect is not obvious, as the contribution is significant in a long time; technological innovation output also have a significant impact on economic growth, it can manifest in the short term. Variance decomposition demonstrates that the effect extent of technology innovation investment is less than that of technological innovation output.