Innovation and economic growth in the mining industry: Evidence from China's listed companies

Abstract As China's mining economy needs to transform from investment-driven growth into innovation-driven growth and in empirical researches the innovation has different influence on economic growth, we should make clear whether the innovation can promte China's mining economic growth. This paper constructs a panel data regression model to examine the relationship between the innovation and economic growth in the mining industry using 415 China's listed companies data from 2012 to 2014. The estimation results show that the unitary innovation level has significant positive effect on economic growth in the mineral extractive industry and the electricity, heat, gas and water production and supply industry. More specifically, the innovation elements including government support, the technical employees’ rate and the technical assets rate have significant positive relationships with economic growth in labor intensive state-owned sector or capital intensive mixed sector, but other innovation elements such as the employees’ rate with college degree or above and R&D intensity do not show significant interaction with economic growth in the mining industry. Therefore, to promote sustainable economic growth in the mining industry, the Chinese government should increase government aid to encourage the mineral companies do the scientific research and pay more attention to the cultivation of technical personnel. Finally, attracting more private investment into capital-intensive and state-owned sectors to improve the structure of China's mining industry is the key to boom the economy in the short term.