Author(s)

Jianguang Wang, Jiayin Li, Shengjun Zhou

Corresponding Author

Jiayin Li

ABSTRACT

This paper uses the entropy method to calculate the evaluation value of the innovation level in high-tech industry and the development level in three industries in China. Then the two evaluation values are subjected to the co-integration test and the Granger causality test to further analyze the equilibrium relationship between the level of innovation in the high-tech industry and the level of development in the three major industries. VAR equation is then introduced to establish an autoregressive model. Next the transmission mechanism of the two evaluation values is analyzed and the picture of pulse respond and variance decomposition is used to estimate the strength of interpretation of the transmission mechanism. The results show that there is an equilibrium relationship between the level of innovation in the high-tech industry and the development level of the primary industry and the secondary industry, and the level of innovation in the high-tech industry has a unidirectional conduction effect on the development level of the primary industry and the secondary industry, with certain hysteretic nature. By comparing the picture of pulse respond and other information, it can be further pointed out that the conduction mechanism of the high-tech industry innovation level index to the second industry development level index is the most significant.

KEYWORDS

High-tech industry innovation, Co-integration test, Granger causality test, VAR equation, Three major industries