Abstract Using regional level panel data from 1998 to 2010, this paper empirically studies how basic research influences technological progresses in various regions of China. The results prove that basic research has a positive effect on technological progresses through knowledge spillover, human capital enhancement and technology instrumentation creation. But the effect is different across regions, i.e., the positive effect is significant in regions with higher level of economic development while the regions with lower level have no significant effect. Further, we test the role of economic development in this effect by setting the threshold regression model and find that the relationship between economic development and the effect of basic research on technological progresses is nonlinear. Only after economy develops to a certain threshold value can basic research promote the technological progress.
2013, Vol. 10 
