A driving force for sustainable economic growth in China from the wave-like effects of technological diffusion

This paper analyses the influence of the spatial association of different provinces on technological diffusion and economic growth, using panel data from 30 Chinese provinces from 2005 to 2016. The results show that firstly, there is a strong spatial correlation in economic growth between the provinces from Moran’s I index and Geary’s C index. Secondly, the decomposition of the direct and indirect effects in the spatial Durbin model reveals that foreign direct investment is a crucial factor for sustained economic growth. Last but not least, technological diffusion, exhibited in wave-like characteristics in China.