The Impact Of Industrial Policy On Industrial Structure And Environmental Performance

Industrial structure means the relationship between the industrial sectors, which illustrates the technology or economic correlation between sectors or industry association. Industrial structure changes can be illustrated as:in the economic growth process, the changes of produce inputs among sectors and the sectoral gross output changes caused by the inputs changes. Industrial structure change is the important method to improve the economic growth, which can influence the whole economy. Thus, this issue is critical significant at the theoretical and realistic level.Global climate change is the most significant environmental problem and the severe challenge of the new century. Global climate change causes by the produce activity of human being. The fundamental measure to improve the climate change is reducing the emission of greenhouse gases (GHG).2003, the UA government provides the concept of low carbon economy, which is supported by other governments. In response to the climate change, as the largest country of CO2emission, China must reduce the emission to maintain the sustained economic growth.In China, from the one hands, the industry policy affects the industry structure changes, from the other hands, the industry policy influences the environmental performance according to the industry structure change. Thus, because the economic structural changes potentially exert influence on the environmental performance, we eventually study the economic and environmental impacts of the policy.Under this background, this paper proposes an economic growth model with policy factor to analysis the economic impact of the industry policy, uses panel data model to empirical analysis the policy effect, and provides extended version of SDA to separate the industry effect from the total changes of sectoral CO2emission of China. There are two main clues of this paper. The first one is illustrating the economic effect of the industry policy by proposing the mathematic model to analyze the path of industry policy and by using panel data model to obtain the empirical results of the industry impact. The second clue is decomposing the six factors that influence the CO2emission and decomposing the environmental effect of policy. At last, this paper gives suggestions on the policy-making.The structure of the paper is organized as follows:the background and the introduction are in chapter1. The literature review is given in chapter2. Chapter3proposes a theoretical model to illustrate the impact of the industrial policy on the industrial structural changes. Chapter4uses the proxy variable people’s daily (PD) to construct the panel data model and test the impact of the industrial policy. In order to estimate the contribution of the PD effect on economic structural change, this paper conducts a regression analysis based on the frequency of the PD’s keywords. Chapter5introduces the input-output model and structural decomposition analysis (SDA) to analyze the factors that influence CO2emission. Chapter6proposes an extended version of SDA to separate the industrial policy effect from the total changes of sectoral CO2emission of China. The conclusion is in chapter7.In this paper, the author finds the following interesting issues:In the multi-sector model, if the model neglects the policy factor, the outputs of the intermediate goods depend on the technology level and capital inputs; the relative capital inputs of each intermediate goods is dependent on the relative technology, the relative amount decided by the final demand, and the elasticity of the intermediate goods in the final demand production. In other words, the capital inputs of intermediate goods depend on the relative status in the final demand production and the relative technology.In the multi-sector model, if the model considers the industry policy effect, the capital inputs of intermediate goods depend on3parts. The first part is the relative status in the final demand production and the relative technology, which is consistent with the case without policy. The second part is the policy effect. The third part is the inputs substitution relationship changes in the intermediate goods production.In the empirical analysis, this paper obtains that People’s daily, which is the proxy variable for the industry policy, has a significant effect on the gross output changes. The results show that the PD effect averagely explains10.1%of the total changes of sectoral gross output. Specifically, the PD has a relatively strong impact on mining sectors and utility sectors, while its impact on manufacture sectors is relatively weak.Although the energy structure of our economy has improved, the economy still relies on the fossil energy and the coal, which is different from that of the depended countries. The energy efficiency still needs to be enhanced. Specifically, the manufacture sectors and the mining sectors have been enhanced, while the utility sectors are relatively low.The technology changes or the Leontief matrix are the important factor to reduce the CO2emission. Thus, improving the technology is important in the sustained economic development.The industrial policy proxy variable (PD) has a positive marginal effect on the sectoral CO2emission.