Impact of capital enrichment on resource allocation efficiency in China’s manufacturing industry

Article type: Research Article

Authors: Ma, Lina^a | Xu, Fengju^a | Wang, Lihua^{b; *} | Taslima, Akther^c

Affiliations: [a] Wuhan University of Technology, China | [b] Changjiang Polytechnic, Wuhan, Hubei, China | [c] Department of Accounting & Information Systems, Jagannath University

Correspondence: [*] Corresponding author. Lihua Wang, Changjiang Polytechnic, Wuhan, Hubei, China. E-mail: [email protected].

Abstract: Capital enrichment (CE) results from capital flows, which reflect the capital distribution among different regions and industries. This paper constructs the evaluation model of resource allocation efficiency from the perspective of capital and innovation resources. It expounds on CE’s theoretical mechanism by using the panel data from 2011 to 2018 for system GMM estimation. It finds that the manufacturing capital allocation efficiency (CAE) and innovation resource allocation efficiency (IRAE) show a volatile development trend. Both static and dynamic panel models show that there is a significant U-shaped curvilinear relationship between CE and CAE, CE and IRAE. CE’s inhibitory effect on CAE and IRAE decreases with the improvement of CE until it exceeds the critical value of 8.27 and 8.93. After that, its impact on CAE and IRAE changes from negative to positive.

Keywords: China’s manufacturing industry, capital enrichment, capital allocation efficiency, innovation resource allocation efficiency

DOI: 10.3233/JIFS-202856

Journal: Journal of Intelligent & Fuzzy Systems, vol. 41, no. 2, pp. 4079-4095, 2021