The Space Panel Econometric Study of Provincial Industrial Structure Rationalization in China

Abstract

The intensive study on the mechanism of rationalization of industrial structure has not been found in previous literature. And effects of influencing factors on rationalization of industrial structure have not been measured more fully. Therefore, this paper analyzes the mechanism of rationalization of industrial structure by presenting a theoretical model from a capital point of view, determines the factors influencing on rationalization of industrial structure and allocates index to them accordingly. In addition, we develop a spatial econometric model of the rationalization of industrial structure, which is estimated by utilizing Chinese provincial panel data over the periods 1992-2011. The results show, that the spatial interdependence of the rationalization of industrial structure between provinces is significant and positive, and promotion effects of per capita GDP, government consumption, domestic physical capital and FDI on the rationalization of industrial structure in this province are positive significantly, and so on.
Key words: Rationalization of industrial structure; Influencing factors; Spatial panel econometrics