A Study On Force Mechanism For Upgrading Of Traditional Industries

This paper discusses the force mechanism for upgrading of traditional industries,which is the prerequisite mechanism to promote traditional industries for upgrading, aswell as to maintain and improve the comprehensive system of economic relations andorganizational system. Discussing the force mechanism for upgrading of traditionalindustries is good to build and constantly optimize the power system of China’sindustrial development. Therefore, it has important theoretical significance and practicalvalue.First of all, by reviewing and summarizing the existing literature, we found that themost essential factors for upgrading of traditional industries mainly containedtechnological innovation, consumer demand and institution. And the influence ofinternal factors is direct while the influence of external factors is indirect. So, the authordoes the research with the perspective of internal mechanism and external mechanism.Then, the author uses the principal component regression method to analyze thefactors raised by previous scholars. And the result shows that three new variables canwell reflect all the information. Meanwhile, the contribution of each variable to newvariables is not the same. Next, the ordinary least squares estimators in the model wereobtained by Software tool, meanwhile the coefficients of the regression equation and themain statistics were inspected, including the test of statistical significance and economicsignificance.From the point view of statistics, the T-test value of each principal componentvariables in the equation is above the critical value, and the corresponding significantlevel is5%, indicating that the principal component variables highly explained the forcemechanism of the upgrading for the traditional industries. Meanwhile, the adjusted R2reached0.7913, indicating the equation has a high fitting degree, and the F-test valuepassed the test, what’s more, the DW-test value also passed the test.From the point view of economic significance, firstly, the estimated coefficients ofterms which reflect the technological innovation, consumer demand, and capital are allpositive. These coefficients are same as the previous theoretical analysis. Secondly, theestimated coefficients of terms which reflect the export levels and the degree ofgovernment’s support for technology are negative. However, it is different from the previous theoretical analysis.Finally, the author draws basic conclusions based on the results of theoreticalanalysis and empirical analysis, meanwhile, makes some suggestions.