Technological Progress And The Optimization Of Service Industry Structure In China: Theory And Empirical Evidence

Since the reform and opening up more than 30 years ago, China's service industry has made a great progress and become the direction of industry restructuring. At the same time, the service structure is being optimized continuously and the proportion of modern service industry is continuously rising, including finance, information, software, etc. "Peport on the Work of the Government of 2011"has pointed out to develop services, accelerate the development of producer services, actively develop life service and develop and upgrade the software industry, Meanwhile the 12th five-year plan proposal put forward to expand new services areas, develope new formats and foster new hot spots. To develop emerging service industries and modern services, and promote optimization of service structure, this fully reflects the government's deep concerns about the development of modern service industry and the optimization of service structure.Taking this into consideration, the dissertation regard scientific outlook on development as the guiding ideology, consider optimizing service industry structure as the goal, and regard the influence of technological progress under open condition on service industry structure in China as the starting point. In the view of globalization, the dissertation makes a systematic study of the depth and manner of the influence which technological progress makes on the optimization of service industry structure at different levels in China through three channels including demand structure, supply structure and service trade structure.In order to find the theoretical point on how the technological progress influences the optimization of service industry structure in China, the dissertation collect and rearrange some relative theories of service industry, changes of service industry structure, technological progress and industry structure change. Combining the perspective of research, the dissertation builds theoretical model with Edgeworth box and Rybczynski theorem, based on factor endowments, discusses the direct effect mechanism of technological progress on the optimization of service industry structure. Meanwhile, the dissertation summarizes three channels of technological progress on the optimization of service industry structure which are demand structure, supply structure and service trade structure.In the opening economy, for the developing countries which are rich in labor and poor in capital, the foreign capital, containing advanced technology, inflows can increase capital supply of the host country, promote the development of modern service industry which is capital-intensive and the optimization of service industry structure. If the host country has a surplus of labor, foreign capital inflows make added new capital supply is greater than, equal to or slightly less than added new labor supply, then technological progress will continue to promote the optimization of service industry structure. But if added new capital supply much less than added new labor supply, then technological progress will be no use to optimization of service industry structure.Technical progress not only plays direct role on the changes of service industry structure, but also plays indirect role on optimization of service industry structure through demand structure, supply structure and service trade structure. From the view of demand structure, technological progress increases the degree of industry specialization and manufacturing demand of modern producer services by deepening social division of labor. Technological progress increases individual income and expand consumer spending by increase labor productivity. Meanwhile it upgrades the demand structure and consumption structure, increase the demand for modern consumer service products, thus to promote the development of modern service industry. From the view of supply structure, by promoting the labor transfer to modern service industry, increasing the knowledge and skills of workers, optimizing investment structure and financial expenditure, increasing infrastructure and so on, technological progress increases the labor supply, the capital supply and the infrastructure supply of modern service industry, thus to promote the development of modern service industry. From the view of service trade structure, via increasing the competitiveness of service trade and optimizing the structure of service trade and so on, technological progress promotes optimization of service industry structure.By analyzing the input-output tables of China in 2007, the dissertation finds the effect of technological progress on optimization of service industry structure is significant. Meanwhile, the cointegration analysis and causality test at regional level show that there exists a long-term cointegration relationship between technological progress and optimization of service industry structure in overall China and the eastern, central, western regions, at the same time, technological progress is the reason of optimization of service industry structure both in the long and short run. The cointegration analysis at industry level shows that there exists long-term cointegration relationship among technological progress and financial industry, real estate, other modern service industry; Granger causality test, impulse response functions and variance decomposition find that technological progress is the reason of optimizing service industry.Demand structure channel is the channel about the impact of technological progress on service industry structure change, which has been discussed the most frequently in theory. The dissertation has conducted empirical test on the theatrical mechanism at the industry and regional level. According to the estimation results of the industry-level panel data, technological progress promotes optimization of service industry structure by increasing the wage of each industry in the modern services; the estimates of the static and dynamic panel data in the regional level show that the growth in technological progress, disposable income per capita and household consumption expenditure of each province accelerates the processes of industry and marketization as well as structure optimization in service industry, and the provincial government consumption expenditure which has lagged effects drive the structure optimization in service industry during a dynamic process. Panel VAR analysis suggests that the impact of final demand structure contributes the most to the structure optimization in service industry.From the supply structure aspect, technological progress gives impetus to the optimization of service industry structure by increasing the investment in fixed assets of each industry in the modern services based on estimation results of the industry-level panel data; and studies of the static and dynamic panel data in the regional level demonstrate that the increases in technological progress, in the share of service sector employment, in the educational level of the population and in the proportion of fiscal expenditure on education, science, culture and health of each province have positive impact on service structure optimization, and the investment in fixed assets of each province has lagged effects on service industry's structure optimization. Panel VAR analysis shows that the impact of capital supply structure on the optimization of services sector contributes the most.In terms of service trade structure, impulse response function results of the non-restrictive VAR model suggest that technical progress promotes the development of China's modern service industry and service structure optimization by enhancing the international competitiveness of China's service trade and optimizing the service trade structure in the short run. Decomposition results of VAR model in equations show that the impact of service trade structure which is followed by the competitiveness of modern service trade contributes the most to service structure optimization.This dissertation recommends that China needs to introduce more advanced foreign investment, strengthen the ability of independent innovation, improve technological level of service industry, and promote structure optimization and structure upgrade in service industry; to guide harmonious development of each region, and optimize spatial distribution of modern service industry; to advance market reforms, and reduce entry barriers of modern service industry; to increase personal income, accelerate the process of industrialization, and upgrade consumption structure and demand structure; to increase accumulation of human capital and physical capital, and optimize the supply structure; to speed up the construction of information technology, and promote the development of modern service industry; to upgrade service trade structure, enhance the competitiveness of modern service trade, and promote the development of modern service industry and service structure optimization through technical innovation and technological progress.