Market Segmentation,industrial Convergence And Economic Growth

In theory,the interaction between regional industrial convergence and market segmentation affects the growth of China’s regional economy.But it is undeniable that on the one hand,many factors cause industrial convergence including historical factors,political factors,natural factors,and so on,and market segmentation is one of the reasons,meanwhile convergence of industry indirectly affects the market segmentation by the degree industry competitive,so the interaction of the industrial convergence and market segmentation still needs further verification.On the other hand,although in most of literature’s opinion,industry convergence and market segmentation are not conducive to economic growth,but the domestic industry convergence and market segmentation still exist.Does this mean that industry convergence and market segmentation for a certain role in promoting the economic growth?Therefore,the impact of market segmentation and industrial convergence on the economy needs to be renewed.In this paper,through theoretical and empirical analysis we study the relationship and mechanism of the impact between market segmentation and industrial convergence and the influence degree of market segmentation and industrial convergence caused by the change to economic growth.Specifically,this paper constructs a theoretical model to show the relationship among market segmentation,industryconvergence and economic growth firstly;then verify the relationship among market segmentation,industrial convergence and economic growth through PVAR model with the provincial panel data during1993-2014,and the provinces are divided into two parts by the East and the west to study the differences of the relationship of the three under different levels of economic development;finally verify the main conclusions of the above empirical again through the panel data regression model.The main conclusions of this paper are as follows:First,through the Granger causality test found that industry convergence or economic growth is the Granger reason of market segmentation,industry convergence or market segmentation is the Granger reason of economic growth,but the conclusion that the market segmentation or economic growth is Granger industry convergence is not very significant.Second,through the impulse response function found market segmentation had a positive relationship with industry convergence on the whole,which means increasing the degree of market segmentation will increase industrial convergence degree,and increasing of the degree of industry convergence will also increase the degree of market segmentation.Overall,the market segmentation has a positive impact on economic growth and industry convergence has the negative impact oneconomic growth which means increasing the degree of market segmentation will promote economic growth in a certain extent and increasing the degree of industry convergence will inhibit economic growth.Economic growth will reduce the degree of market segmentation and industry convergence.Third,we found that the impact of industrial convergence on the market segmentation in the eastern region and the central and western regions is negative through empirical test.The impact of market segmentation on industrial convergence is negative,which is more significant in the central and western regions than that in the eastern regions.The increasing of market segmentation degree in the eastern region will restrain economic growth and increasing of the degree of market segmentation in the central and western regions will promote economic growth.The influence of economic growth in the eastern and central and western regions on industrial convergence is all negative,but the two are slightly different in the changing trend.Fourth,we found that the impact of industry convergence on economic growth is negative and the impact of market segmentation on economic growth is actually showing inverted U type.