The Impact Of Internet Application On Total Factor Productivity

In October 2020,the Fifth Plenary Session of the 19 th Central Committee of the Communist Party of China proposed to speed up the construction of a new development pattern with the domestic circulation as the main body and the domestic and international dual circulation promoting each other.Especially in the context of the surging trend of antiglobalization and the global spread of the new crown pneumonia epidemic,the security of the industrial chain and the stability of the supply chain have been greatly challenged.How steadily increasing the level of TFP has become the primary task of promoting the highquality development of the national economy.In recent years,China has vigorously implemented the "Internet +" action plan,which aims to use the Internet to promote market development,find new business models suitable for current economic development,enhance corporate innovation capabilities and optimize the industrial structure,thereby improving the quality and efficiency of economic growth.In this context,this thesis takes Internet applications as the starting point,distinguishes Internet hardware and software applications,and analyzes China’s Internet application level and TFP of the service industry and the secondary industry.Exploring whether Internet hardware and software applications have an impact on TFP,the thesis tries to answer the "Solo Paradox",reveals the possible impact mechanism of Internet applications,and puts forward policy suggestions.First,this thesis sorts out the current literature related to the Internet and TFP,and summarizes the current research directions and areas that need to be supplemented.Secondly,this thesis carries out a conceptual definition and theoretical analysis.This thesis clarifies the conceptual connotation of the Internet application and TFP studied in this thesis,and briefly sorts out the basic theory of economic growth and TFP involved in the research,which will provide the basis for subsequent analysis support.Thirdly,this thesis proposes the direct effect and indirect mechanism of Internet hardware and software applications on TFP.Then,the thesis conducts the current situation and statistical analysis of Internet application and TFP,including the current situation description and statistical analysis of Internet application,as well as the results of TFP in China’s inter-provincial service industry and secondary industry from 2007 to 2017 calculated by using DEA-Malmquist.Finally,based on setting the measurement model,the fixed effect model(FE)and the two-stage least squares model(2SLS)are selected to conduct the empirical analysis between Internet application and TFP from three levels: benchmark regression analysis,heterogeneity analysis,and mediation mechanism test.After passing the robustness test,this thesis draws the conclusion of the research.The analysis results of this thesis show that:(1)For the general analysis,the first is the description of the current situation of Internet applications.With the steady progress of infrastructure construction,the strength of China’s Internet development continues to increase,the scale of Internet users continues to expand.The gap between urban and rural Internet applications continues to narrow,and new Internet formats continue to emerge.However,there are also problems of low investment in basic research and low level of basic Internet hardware technology.Secondly,through statistical analysis,this thesis finds that the Internet hardware and software application level and TFP level show a steady growth trend as a whole,but there are big differences at the industrial and regional levels.(2)In the benchmark regression analysis,after considering the endogeneity problem,the application level of Internet hardware has a negative impact on TFP,while Internet software has a positive impact on TFP.(3)In the empirical analysis of heterogeneity,from the perspective of different industries,China’s Internet hardware application has a significant negative impact on the secondary industry’s TFP.But the negative effect on the service industry is not significant.The application of Internet software has a significant positive effect on the service industry’s TFP,but the positive effect on the secondary industry is not significant.From the perspective of different regions,the application level of Internet hardware in China has a significant negative effect on TFP,which decreases from east to west;the application level of Internet software has a positive effect on TFP,which increases from east to west,and only the western region does not show significance.This shows that the impact of Internet hardware and software application levels on TFP presents uneven differences among industries and regions.Therefore,based on the importance of TFP in high-quality economic development,this thesis puts forward three policy recommendations which combines with the research conclusions.First,attaching importance to basic research and improving the level of Internet technology innovation.Second,strengthen software investment to further promote the improvement of TFP.Third,coordinating the allocation of resources and paying attention to the balanced development of Internet application levels.Fourth,catching market opportunities and deepen the promotion effect of Internet application on TFP.