Does structural deceleration happen in China? Evidence from the effect of industrial structure on economic growth quality

Tinghui Li; Xue Li; Tinghui Li; Xue Li

doi:10.3934/NAR.2020009

National Accounting Review

2020, Volume 2, Issue 2: 155-173. doi: 10.3934/NAR.2020009

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Research article

Does structural deceleration happen in China? Evidence from the effect of industrial structure on economic growth quality

Tinghui Li ,
Xue Li ^,

School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China

Received: 20 April 2020 Accepted: 05 May 2020 Published: 09 May 2020
JEL Codes: C23, D24, O12

China's economy has experienced high-speed development, followed by structural deceleration according to law of development. Does it happen in China? This is the problem focused on in this paper. We explore the appearance for structural deceleration in China through the relation between industrial structure and economic growth quality. The green total factor productivity is selected as the measurement assessing the economic growth quality. We use the Global Malmquist-Luenberger index to measure economic growth quality of China for 30 Chinese provinces over the period of 1998 to 2015. First, the panel regression model is used to show a positive effect of industrial structure on economic growth quality with full sample as well as subsample in the east of China. Negative effects of industrial structure are shown in the middle and west of China. Then the structural deceleration is captured by panel quantile regression model. We claim that structural deceleration indeed happens in China through a decreased contribution of industrial structure to the economic growth quality at different quantiles. However, industrial structure in the east of China still plays a positive role in accelerating the economic growth quality, while its negative effect is anabatic in the middle of China. Finally, we investigate the influencing mechanism of industrial structure on economic growth quality represented by the moderating effects of human capital, innovation capacity and economic development level. All of them show positive moderating effects. The human capital and innovation capacity show heterogeneous at different levels of economic growth quality, contrary to economic development level. Some policy implications are derived according to the results achieved in this the pap
- industrial structure,
- economic growth quality,
- structural deceleration,
- moderating effect,
- panel quantile regression model
Citation: Tinghui Li, Xue Li. Does structural deceleration happen in China? Evidence from the effect of industrial structure on economic growth quality[J]. National Accounting Review, 2020, 2(2): 155-173. doi: 10.3934/NAR.2020009

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Abstract

China's economy has experienced high-speed development, followed by structural deceleration according to law of development. Does it happen in China? This is the problem focused on in this paper. We explore the appearance for structural deceleration in China through the relation between industrial structure and economic growth quality. The green total factor productivity is selected as the measurement assessing the economic growth quality. We use the Global Malmquist-Luenberger index to measure economic growth quality of China for 30 Chinese provinces over the period of 1998 to 2015. First, the panel regression model is used to show a positive effect of industrial structure on economic growth quality with full sample as well as subsample in the east of China. Negative effects of industrial structure are shown in the middle and west of China. Then the structural deceleration is captured by panel quantile regression model. We claim that structural deceleration indeed happens in China through a decreased contribution of industrial structure to the economic growth quality at different quantiles. However, industrial structure in the east of China still plays a positive role in accelerating the economic growth quality, while its negative effect is anabatic in the middle of China. Finally, we investigate the influencing mechanism of industrial structure on economic growth quality represented by the moderating effects of human capital, innovation capacity and economic development level. All of them show positive moderating effects. The human capital and innovation capacity show heterogeneous at different levels of economic growth quality, contrary to economic development level. Some policy implications are derived according to the results achieved in this the pap

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