Structural dividends and economic growth in China

Abstract

This study aims at analyzing the impact of industrial structure upgrading on the economic growth of China. Based on panel data of 283 cities of China from 2001 to 2014, this paper uses the spatial panel SARAR to analyze the influence of industrial structure upgrading on the economic growth of China’s prefecture-level cities. The results show that China’s urban economic growth has significant spatial correlation: industrial structure upgrading is the prime reason for the economic growth and the differences in the urban economy in China, and the impact of structural dividend on economic growth is positive. However, with the further upgrading of the industrial structure, the structural dividend will become negative, i.e. there is a significant inverted “U” relationship between the industrial structure and economic growth. The study provides new empirical evidence for the new classical economic growth theory and a new research experience for a follow-up study.

Keywords

• industrial structure upgrading
• structural dividends
• SARAR model
• China