Building a knowledge economy: The interplay of higher education attainment, public finance, and law and order
Ting Xu, Yulin Luo, Honglei Huang, Jiaohua Liu
Keywords:
Knowledge economy; Higher education attainment; Public finance; Machine learning; China
Abstract:
This study explores the influence of disaggregated fiscal outlays on education, science and technology (S&T), and research and development (R&D) concerning provincial economic advancement in China. Additionally, it assesses the moderating influence of higher educational attainment and the facilitating impact of law and order in cultivating a knowledge-driven economy. Utilizing panel time series data spanning from 2004 to 2023 across 31 provinces in China, the research engages sophisticated econometric methodologies alongside machine learning techniques, which encompass artificial neural networks. Such methodologies facilitate a rigorous estimation of both the long-term and short-term impacts of public expenditure and institutional quality on gross provincial product per capita (GRPC). The analysis indicates that the attainment of higher education exerts an inconsequential influence on GRPC in both the short and medium terms; however, it demonstrates a significant contribution in the long term. Fiscal allocations directed toward education, S&T, and R&D consistently exhibit positive impacts on GRPC over an extended period, underscoring their importance in fostering economic efficiency and competitiveness. Furthermore, the enforcement of law and order is recognized as an essential facilitator, enhancing the efficacy of public expenditure on economic performance. The results exhibit robustness across a range of advanced econometric techniques and machine learning approaches.
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 Building a knowledge economy: The interplay of higher education attainment, public finance, and law and order [PDF file] [Filesize: 1.14 MB]
 10.7441/joc.2025.03.02
Luo, Y., Xu, T., Huang, H., & Liu, J. (2025). Building a knowledge economy: The interplay of higher education attainment, public finance, and law and order. Journal of Competitiveness, 17(3), 34-62. https://doi.org/10.7441/joc.2025.03.02
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