Industrial Diversity Of Theoretical And Empirical Research

Under the rapidly changing global economy, how to adjust industry structure in order to ensure sustainable economic development has became an important task faced by all regions. Industrial diversity is an important aspect of industry structure, so industry diversity has begun to receive increasing attentions. However, economic theories focus on the impact of efficiency improving and input growth on economic growth. Although the debate on whether regional economy should be specialized or diversified has existed long ago, the debate is still unresolved. Existing researches can not provide useful and clear guidance for practice of diversification. The main reason is the lack of adequate understanding of industry diversity itself, industry diversity is still like a black box. Based on the current status of research, this paper presents some questions:Firstly, why almost all regions maintain a certain level of industry diversity? why industry diversity among different regions maybe significantly different?Secondly, whether industry diversity is conducive to economic growth or not, and how diversity contributes to economic growth?This paper will closely focus on these questions, and analyze industry diversification strategy to build a relatively comprehensive framework. This paper is organized as follows:Chapter 1 is an introduction, where we bring out the main issues studied in this paper, the methods of such research framework and major innovations.Chapter 2 is about concept and measurement of industry, the main aim of this chapter is to define concepts, summarize measurement methods of industry diversity and measure industry diversity of regions in China. Firstly, the evolution of the diversity concept will be analyzed in order to define the implication of industry diversity. Secondly, we summarize various measurement methods of industry diversity, and analyze characteristics of various measurement methods, in which we make detailed analysis of entropy index. Lastly, based on data of 32 major industry categories and corresponding 163 categories, we use entropy index to measure the industrial diversity for provinces of China and compare different results of industry diversity.Chapter 3 is about theoretical analysis of determinants of industry diversity, the main aim of this chapter is to analyze theoretical basis for the existence of industry diversity in order to unlock the black box of industry diversity. Firstly, from the regional level, combined with regional specialization of production, we analyze microscopic mechanism for the existence of industry diversity. Secondly, we analyze the determinant factors of industrial diversity. Lastly, we build theoretic models of industry diversity including a single region model and the two regions game model. In single region model, we take into account diversity preferences in production, size, transportation cost, land rent, and so on. In two regions game model, we analyze the relationship between trade and industry diversity.Chapter 4 is empirical analysis of the determinant factors of the industry diversity, the main aim of which is to analyze characteristics of industry diversity distribution and empirically analyze determinant factors of industry diversity. Firstly, we analyze the evolution of industry diversity for provinces of China, and differences of industry diversity among provinces. Secondly, we summarize the typical characteristics of industry diversity distribution. Finally, we make empirical study of determinant factors of industry diversity based on data of these provinces.Chapter 5 is about the relationship between industry diversity and economic growth, the main aim of which is to analyze how industry diversity affects economic growth. Understanding the mechanism is very important for the development and implementation of industry diversification strategy. Firstly, we study the mechanism of how industry diversity affects economic growth. The analysis will be organized into three aspects, which are economic stability, dynamic externality and entrepreneurship. Secondly, we make empirical study of the relationship between economic growth and industry diversity, in which we use the methods of principal component analysis to refine other factors.In Chapter 6, we put forward the concept of regional capacity of industry diversification, discuss industry diversity strategy based on the capability, and introduce moderate economic diversification of Macao Special Administrative Region. In Chapter 7, we make a conclusion for the paper.