Capital Deepening, Technological Progress And Industrial Upgrading

Upgrading the industrial structure is an important part of economic structural transformation, but also the inevitable requirement for sustainable economic growth. On the one hand, the process of industrialization in China and upgrade the industrial structure turn, many scholars have conducted research and technological progress, but few scholars have researched the effect of capital deepening to upgrade the industrial structure, and research often has a particular focus a certain industry, such as manufacturing.So, what is the role of the capital deepening and technological progress in industrial structure upgrading in various regions? On the other hand, the capital stock is a very important variable in the study of China’s macro-economic. In the absence of the capital stock of official data, so the research can only be estimated or reference data in the existing literature. However, the method of calculation of the capital stock of the literature is different, which led to the capital stock estimation results and the final conclusions of the study have different versions. Moreover, in the existing literature, there is a big question about the accuracy of the underlying data, and fixed depreciation rate also deviates from the actual situation. This led to the current literature measure results and data used lack accuracy and rigor to a large extent.In view of this, this paper makes the most basic work- "re-estimates of provincial capital stocks" as the starting point, and another work as the convergence, that is "use the results to calculate estimates mainly related variables- capital deepening and technological progress indicators". Then we put the technological progress, capital deepening and upgrading of industrial structure under the same analytical framework to research what’s the effects technological progress and capital deepening on the industrial structure upgrading. Moreover, we make empirical analysis at regional level to study the effect of capital deepening and technological progress on the upgrading of industrial structure, and analyze whether there are differences between regions.In the first major content, in the aspect of capital price index, this paper analyzed, screened and treated on the basis of the relevant data to ensure the accuracy of the calculation results. In the aspect of depreciation rate, this article fully respected and used official data of depreciation of fixed assets, thus ensuring accuracy and reasonableness of provincial capital stock.In the second major content, we use the provincial capital stock to calculate capital deepening and indicators and indicators of technical progress. We use DEA-Malmquist index to calculate the indicators of technical progress with software DEAP2.1. Then, we make empirical analysis at the national level and the east-mid-west regional level to study the effect of capital deepening and technological progress on the upgrading of industrial structure, and analyze whether there are differences between regions.When analyzing at the national level, we use the country’s 30 provinces’ panel data to make regression estimation with selecting the fixed effects model(FE) in metrology software Stata12.0. When analyzing on the regional level, first area is divided: the eastern region comprising 11 provinces(regions), the central region contains 8 provinces(regions), the western region comprising 11 provinces(regions). Then, we choose long panel data processing method- comprehensive FGLS regression estimation method to make regression estimations.In this article, we use the secondary industry and tertiary industry output ratio as indicators of industrial structure upgrading. The main conclusions of this study can be summarized as follows:Overall economic technological progress mainly come from the second industry, thus contributing to the rapid growth of the secondary industry, but from the perspective that economic structure of the transition to the third industry it is not worth too optimistic. Although overall economic capital deepening has led to the industrial structure transformation from the second to the third industrial industry, in which implied a fact that the second industrial investment efficiency losses caused by excessive investment. From the local level of economic development and foreign trade demand perspective, we can see demand-pull conditions of the industrial structure to the third industrial restructuring has not yet reached, which is inextricably linked of the national income distribution and trade structure. The increase of average years of education of employees in the eastern region can better promote the development of tertiary industry, but in the mid-west part perform poorly. Local fiscal expenditure in the eastern biased in favor of the tertiary industry, this may be due to land finance and real estate; in the mid-west region tend to its income mainly industry- the second industry. Although foreign direct investment has played an important role in promoting industrial development, due to the constraints of foreign policy, making use of its role in promoting the tertiary industry can not appear.Finally, according to the conclusions of this paper, in the view of promoting secondary and tertiary industries jointly developing and transition to the tertiary industry, we put forward policy recommendations. 1. To pay more attention to structure optimization in overall economic technological progress, enhancing the tertiary industry in technological progress.2. Increase capital support for the tertiary sector. 3. To optimize the distribution of national income, increase household real disposable income. 4. To improve utilization of foreign policy, to play the role of financial support for foreign investment. 5. To improve the level of education practitioners and labor quality.Contributions and possible innovations of this paper are as follows: 1. In the aspect of basic work of economics, this paper rigorously re-measured the provincial capital stock.2. We make empirical analysis at regional level to study the effect of capital deepening and technological progress on the upgrading of industrial structure, and analyze whether there are differences between regions.