Marine economic growth, technological innovation, and industrial upgrading: A vector error correction model for China

Few studies have discussed marine industrial upgrading and its association with marine economic growth and technological innovation. This study uses a vector error correction model (VECM) to explore the short-term and long-term relationship between marine economic growth, technological innovation, and industrial upgrading in China from 2006 to 2016. Results reveal the existence of two co-integration relationships between the three variables: specifically, in the long term, marine economic growth positively affects marine technological innovation, and vice versa; however, neither promote industrial upgrading and neither are promoted thereby. These findings indicate that marine economic growth and technological innovation are mutually promoting in the long term, but the mutual driving mechanism between the upgrading of marine industry and the other two variables has not yet formed. The study also reveals that the shift from secondary industry toward tertiary industry is not conducive to improving marine technological innovation, which is especially alarming given the current service-oriented tendency of China's marine industry. Key policy implications include the need to expand the relative size of the marine economy, prioritize developing marine secondary industry, develop marine technology, and train high-level marine professionals.