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Changes in Industrial Structure and Economic Growth under the New Normal Condition——Based on Provincial Dynamic Panel Data Model with GMM Estimation |
LU Xuefa,DU Chuanzhong |
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Abstract Under the new normal condition, there is an important policy implication to appropriately handle the relationship between steady growth and structural adjustment. Two different industrial structure change indices of NAV and MLI are built in this paper based on the provincial-level panel data from 1993 to 2013 and they are verified through empirical test with GMM method. The results reveal that throughout the whole nation, in short term, there exists a two-way Granger causality relation between the industrial structure change and economic growth; in relatively long term, there exists only a single-way Granger causality relation from economic growth to industrial structure change. Moreover, from the provincial-level, great heterogeneity has been found in the Granger causality relation between industrial structure change and economic growth. Based on the conclusion above, it is argued in the paper that the industrial policies are not effective in long term and the formulation of the industrial policies is selected and decided depend on period of term, different regions, time and opportunities; meanwhile, to avoid the deficiency caused by the defect of the industrial policies, efforts should be made to avoid the presence of “structural negative profit”.
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Received: 10 August 2015
Published: 15 February 2016
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Corresponding Authors:
LU Xuefa
E-mail: luxuefa@163.com
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