Technological Innovation Capability and Middle-Income Trap in China - The Mediating Role of Human Capital and Moderating Role of Institutional Environment

Abstract

Purpose: This paper aims to address the above issues by studying the impact mechanism of technological innovation capability on China's middle-income trap, as well as the mediating role of human capital and moderating role institutional environment, so as to provide a reference for China and other countries to overcome the middle-income trap. Design/methodology/approach: This study uses quantitative empirical analysis methods based on panel data and time series to examine the impact of technological innovation capabilities on China's middle-income trap. This study selects the secondary data of China's macro level from 2000 to 2022 to carry out empirical analysis. Findings: The results of the study show that technological innovation capacity has a positive effect on China's crossing the middle-income trap, while human capital as a mediator and and the institutional environment as a moderator. Research limitations/implications: This study is mainly based on the national-level panel data, which may not be able to fully capture the differences in innovation behavior and institutional environment at the provincial data and micro-enterprise levels, so the selection of variables is limited in dimension. Practical implications: The findings of the study provide suggestions for China to cross the middle-income trap and provide reference for the next policy direction. Originality/value: The originality of this study lies in the systematic construction of the "technological innovation capability - human capital - institutional environment" mechanism to explain China's middle-income trap problem, which not only expands the theoretical framework, but also provides policy implications that are highly consistent with the national strategy.