The Impact Of New Infrastructure Investment On Industrial Structure Changes: A Theoretical Model And Simulation

In 2018,the Central Economic Work Conference proposed that we must play the key role of investment,accelerate the pace of 5G commercialization,and strengthen the construction of new infrastructure such as artificial intelligence,industrial Internet,and Internet of Things.After that,the State Council government work report and various central conferences repeatedly mentioned the need to accelerate the construction of new infrastructure such as information networks.As China enters a new era of high-quality economic development from the stage of high-speed economic growth,economic and social development is facing many challenges such as the transformation of major social contradictions and economic downturn,and economic growth urgently needs new impetus.Therefore,the new era puts forward new requirements for infrastructure.As an important role in the new round of scientific and technological revolution and industrial change,the new infrastructure in the short board while promoting the supply of new kinetic energy,to help economic transformation and upgrading,and thus becoming a new engine of economic development in the new era.Based on this,this paper takes the positive externalities of new infrastructure and sectional heterogeneity as the starting point,and hopes to explore the impact of new infrastructure on the change of industrial structure through theoretical model analysis and numerical simulation.First,this paper determines the capital stock of new infrastructure as a measure of new infrastructure according to the nature of infrastructure.In view of the fact that there is no complete set of new infrastructure capital stock data available for study,this paper estimates various types of capital stock（initial value）from 2003 to 2018 at different levels in the country,especially at the prefecture-level on the basis of the existing official statistics and relevant literature,and takes this as the basis for the analysis of this paper.Secondly,this paper constructs a competitive dynamic general equilibrium model that includes two major production sectors of manufacturing and service industries,solves the equilibrium conditions for the model according to a series of assumptions of the model,and then examines how the expansion of new infrastructure investment affects the development of manufacturing and service industries through theoretical analysis,and draws the following conclusions:1)The direction of change in output structure,capital structure and employment structure which represent the industrial structure is affected by the relationship of output elasticity.2)Under certain assumptions,the change of industrial structure is affected by the output elasticity coefficient and the relationship of size between?₁、?₂ and（35）?^k、（35）?.Especially when?₁（27）?₂ and（35）?^k?（35）?,the increase in new infrastructure capital makes the proportion of employment in the service sector continue to rise,while the manufacturing sector shows a corresponding downward trend,thus promoting the industrial structure to the service.Furthermore,this paper uses the data of various types of physical capital stock at the prefecture-level estimated above,uses the fixed-effect regression estimation model to estimate the output elasticity of each production factor in the whole sample,and further estimates the output elasticity of various production factors in the eastern region and the central and western regions,and the final results show that the output elasticity value of the two industrial sectors meets the theoretical assumptions.The estimated elasticity factor of output provides an important basis for subsequent parameter calibration.Finally,this paper calibrates the parameters of the model,and conducts benchmark simulation,counterfactual simulations and sensitivity analysis according to the elastic values of production factors representing different regions in China,and finally draws several conclusions on the impact of new infrastructure investment on industrial structure changes:1)Under certain parameters,the expansion of new infrastructure investment can promote the development of the service industry.Moreover,the proportion of employment in the service industry and the proportion of real output are consistent.2)Increasing investment in new infrastructure will help promote the industrial structure to the service.3)Consistent with the conclusion of the theoretical model analysis,the direction of industrial structure change is affected by the elasticity of output.Under the premise of satisfying a series of assumptions,the specific direction of industrial structure change depends on the relationship between the size of（35）?^kand（35）?.Based on the conclusions,several policy recommendations are finally made.First,increase investment in new infrastructure,especially in the central and western regions.Second,continue to promote the development of new infrastructure in the eastern region.Third,improve the contribution of new infrastructure to the manufacturing sector and the contribution of non-infrastructure capital to the service sector in the central and western regions,and promote the central and western regions to converge on the eastern region.