Regional innovation capability and regional average wage: An empirical analysis based on the provincial panel data in China

The paper explores the relationship between the regional innovation capability and the average wage of staff and workers, and also investigates the three important factors which impact on this relationship. The three factors are the degree of regional specialization, the number of industrial enterprises above designated size and gross regional product. From an empirical point of view, we use the Chinese provincial panel data through six years from 2003 to 2008, the results are confirmed by using the regression of the fixed effect model and the random effect model. As is shown in the results, the regional innovation capability exerts a positive impact on the average wage of staff and workers. Considering the degree of the regional specialization, the effect will be more significant. The number of industrial enterprises above designated size has no significant effect on this relationship. However, the gross regional product exerts a negative impact on the relationship between the regional innovation capability and the average wage of staff and workers.