Adjustment of Economic Growth Target and Regional Technological Innovation — From the Perspective of Goal Commitment

Abstract

The report to the 20th National Congress of the CPC emphasized the deep implementation of the innovation-driven development strategy, continuously shaping new growth drivers and advantages for development. A critical issue in achieving high-quality economic development under the “steady growth” framework is how to lead regional innovation through policy empowerment. Particularly, within the economic growth target management system, the specific setting and adjustment of local government economic growth targets influence enterprises’ uncertainty perceptions, further affecting their innovation decisions.

This paper examines the impact of economic growth target adjustments on regional innovation under different levels of target commitment in prefecture-level cities across China. By manually collecting economic growth target data from these cities and combining it with the urban innovation index disclosed in China’s Urban and Industrial Innovation Report 2017, this study finds that low economic growth target commitment often leads to adjustments being interpreted as negative economic signals, thereby restraining regional innovation. Conversely, high economic growth target commitment enhances government credibility in guiding economic development, and target adjustments can promote regional innovation by releasing “opportunity signals”.

Further research based on the ternary framework of local economic growth target management shows that the inhibitory effect of target adjustment on regional innovation is more pronounced when the target is irrationally raised, or the target is relatively high and the local government is chasing “layer by layer”. In contrast, under a high degree of target commitment, the promotion effect of target adjustment on innovation will only appear when the target is not raised, the target is relatively low in the regional ranking, and local governments do not deliberately pursue “layer by layer”. These findings highlight the complex interplay between policy signaling, stakeholder expectations, and institutional frameworks in shaping the innovative capacity of regional economies.

This study significantly contributes to the existing literature in three key ways. Firstly, it diverges from prior works that predominantly investigate the economic outcomes of static economic growth objectives by exploring the influence of target adjustments on regional innovation dynamics, offering a novel perspective on the dynamic nature of economic growth targets. Secondly, by incorporating the concept of growth target commitment, which captures the alignment between set economic growth targets and actual economic endowments, the study examines the differential impacts of economic growth target modifications on regional innovation across varying degrees of commitment. This approach provides valuable insights for local governments navigating the “stable growth” phase in their strategic adjustment and enforcement of economic growth targets. Lastly, grounded in the tripartite framework of local economic growth target governance, the paper elucidates how local governments’ motivations behind adjusting economic growth targets shape regional innovation activities, thus providing impetus for the systematic development of an economic growth target management system.

The research in this paper explains the guiding logic of economic growth targets for regional innovation activities under heterogeneous target commitment, aiding governments in setting and adjusting economic growth targets more scientifically during the “stable growth” stage. This helps effectively lead regional innovation activities through economic growth targets. Local governments must not only adjust economic growth targets according to the goal of “stable growth” but also ensure alignment with local economic resources, eliminate short-term economic development orientations, and stabilize enterprises’ innovation expectations.