Research On The Impact Of Substitution Elasticity On China's Logistics Industry Growth

Forty years of reform and opening up,with the rapid growth of China's economy,the dependence of the social development on logistics is enhanced,and the total amount of social logistics is rising steadily.Social development needs strong support of logistics industry,and influenced by the social economy,the growth rate of logistics industry has been declining in recent years.In addition,there are still some problems in China's logistics industry,such as mismatch of labor force elements,overcrowding of capital investment,waste of resources and so on.These constraints undoubtedly exacerbate the slowdown of China's logistics industry.With the rise in production factor prices in recent years,the contribution of traditional factor extensive accumulation to economic growth gradually declined,the development of logistics economy needs change from single factor input to rational allocation of elements,and the promotion of industrial should base on the optimal allocation of elements and improvement of efficiency.In addition,with the transformation of the national economic growth mode and the change of logistics demand structure,and with the gradually formed buyer logistics market such as consumer logistics and e-commerce logistics,the growth speed and quality of the logistics industry need to be improved.Factor substitution elasticity is an important parameter to measure the efficiency of resource allocation in the market.The flow efficiency of elements and the substitution relationship between elements reflect the market efficiency.In the approximately eighty years that the substitution elasticity has been proposed,it has been widely used in the fields of technical progress bias,economic growth and factor income share.Therefore,there are two main reasons to research on the impact of substitution elasticity on China's logistics industry growth.Firstly,considering the combination of different factors and their substitution can ease the cost pressure caused by the increase in the factors price in logistics industry when the input of logistic industry enters high cost era,but the research on factor substitution elasticity of logistics industry has been neglected for a long time.Secondly,under the background of regional industry coordinated development,to clarify the mechanism of substitution elasticity on economic growth,to analyze the development trend and regional difference of substitution elasticity in China's logistics industry,and to test the growth effect and convergence effect of factor substitution elasticity are important basis for formulating regional industrial policy.Therefore,it is necessary to measure the capital-labor substitution elasticity of logistics industry,and to verify the relationship between the substitution elasticity of factors and the growth of logistics industry.In view of the above background,this paper tries to study the growth effect and convergence of substitution elasticity in China's logistics industry on four aspects: Firstly,How and what is the development trend of the substitution elasticity in China's logistics industry;secondly,what is the direct effect and induced technological innovation effect of China's logistics industry seperately;thirdly,from the overall regional economic perspective,what is the relationship between substitution elasticity and logistics industry growth and if the relationship of them are consistent with the “De La Grandville hypothesis”;fourthly,under the background of coordinated development of regional industry,whether the promotion of substitution elasticity will be helpful to reduce the regional development difference of logistics industry.To answer these questions needs a more systematic economic analysis.In the theoretical analysis,we define the research scope of the logistics industry in this paper;comb the measuring method of substitution elasticity and also the advantage and disadvantage;discuss the influence factors of logistics industry elasticity;clarify the intrinsic response mechanism between substitution elasticity and biased technical progress;expand the relationship between substitution elasticity and economic growth from the view of factor endowment theory,industrial productivity and technological progress;finally,base on the "efficiency effect" and "distribution effect" of substitution elasticity,deeply analyze the mechanism of substitution elasticity on the growth of logistics industry.In the empirical analysis,base on the relevant data of the logistics industry of 29 provinces in the mainland of China for 1978-2015,estimate the substitution elasticity of Overall,East,Central and Western regions of China's logistics industry,and decompose the substitution elasticity of logistics industry into direct substitution effect and induced technological innovation effect.Except this,carry out the empirical analysis and stability test on the correlation between the substitution elasticity of china's logistics industry and industrial growth with Fixed effects model,random effect model,two stage least squares estimation,and two stage least squares estimation in lag phase.Finally,according to the equation of Sara-i-Martin(1996)to construct the ? convergence model,verify the convergence effect of substitution elasticity on the growth of logistics industry.Through the theoretical and empirical analysis,get the main conclusions as follow:1.The capital-labor substitution elasticity of the logistics industry in the whole country,the East and the west is less than 1,the relationship between capital and labor force are complementary.Therein,the substitution elasticity in the eastern region is higher than the middle and western regions,the substitution elasticity in the three regions are 0.989?0.889 and 0.842.From the track of substitution elasticity,the substitution elasticity of logistics industry in the three regions all experienced the changing trend from constant to rise then to fall.Specifically,before 1994,the capital-labor substitution elasticity of the three regional were similar and close to 1,then the substitution elasticity of the mid and western regions decreased significantly;the substitution elasticity of eastern region was still rising till 2009 and then decreased gradually.2.Use the CES production function to decompose the substitution elasticity of logistics industry into direct substitution effect and the induced technological progress effect.The conclusion is that the contribution ratio of direct substitution effect in total effect is 97.98%,the contribution ratio of induced technological innovation effect is 2.02%.This means that the direct effect of substitution elasticity is still the main reason for the factor substitution in China's logistics industry,and the induced technological progress has little effect on the substitution elasticity of logistics industry.3.There is a positive correlation between the substitution elasticity and the growth rate of China's logistics industry,and the improvement of substitution elasticity.is beneficial to the growth of the regional logistics industry.According to the regression results of the fixed effect in the national model,the growth rate of the logistics industry will be increased by 0.15% when the substitution elasticity is increased by 10%.The influence coefficient of elasticity of substitution from west to east regions are 0.0282,0.0146 and 0.0079,that means if the substitution elasticity increase every 10%,the logistics industry growth rate will increase0.28%,0.15% and 0.08% in the west,mid and eastern region respectively.4.The improvement of factor substitution elasticity is helpful to the convergence of regional logistics industry.Through the method of introducing the control variables,such as the proportion of the third industry,the capital return ratio and passenger turnover rate,step by step base on absolute ? convergence model,the convergence speed of the logistics industry increased from 7.92% to 10.14%.The convergence of the substitution elasticity has a significant positive effect on logistics industry,the promotion of substitution elasticity will help to narrow the development gap of the regional logistics industry.The above conclusions deepen the understanding of the relationship between substitution elasticity and the regional logistics industry growth.The main contribution of this paper is: firstly,consider the the biased technological progress in the logistics industry which is different from the previous assumption that the logistics industry is based on the neutral technological progress,this will provide a new way for the future research of logistics industry;Secondly,extend the research on factor substitution elasticity from the macro economic field to the industrial economy field,combined with the theory of industrial structure change to make deep study on the time variation and interval characteristics of factor elasticity of substitution in China's logistics industry;finanly,introduce the substitution elasticity into convergence analysis of regional logistics industry,the related research is relatively few but a useful attempt for existed study.