HAO Shuobo, NI Ni:Innovation Heterogeneity, Public Education Expenditure Structure and Economic Growth

Abstract：Based on the endogenous economic growth theory, this paper builds an economic growth model with the growth effect of imitation and innovation. Furthermore, this paper investigates the non-linear growth effects of public education expenditure structure in this framework. The theoretical and empirical study shows that higher education can prompt innovation and economic growth and has a positive non-linear growth effect with horizontal innovation. Meanwhile, secondary education can prompt imitation and economic growth and has a positive non-linear growth effect with vertical innovation. Furthermore, the two non-linear growth effects are incompatible. In conclusion, the optimal public education expenditure structure depends not only on the relative horizontal and vertical innovation but also on the growth strategy of this country.

Key words： Public Education Expenditure Structure   Horizontal Innovation   Vertical Innovation   Economic Growth

source:Finance & Trade Economics ,No.7,2014