LAUSR

Abstract This research examines the roles of government policies within the national innovation system (NIS) in promoting effective social entrepreneurial action and enhancing economic growth in rural sectors. We investigate government's role in promoting effective social entrepreneurial action within the NIS framework in rural sectors through a change in technology policy and NSI structure. We analyze longitudinal data that tracks China's NIS, government-led R&D investments and labor mobility and rural economic growth during the 1998–2009 period. The results provide robust support for the positive effect of the NIS on rural economic growth, and this positive relationship varies across the coastal and interior regions of China. The idea of this perspective piece is, the positive impact is stronger for high levels of labor mobility and R&D expenditure, especially for rural areas in China.