Comparative Analysis On The Influence Of The Marginal Products Of Capital In Domestic Manufacturing Industry

Manufacturing plays an essential role on developing the economy of a country or a region, as well as enhancing the ability of competition. With reforming and opening up continuously, it comes to be the key of the steady development of the domestic manufacturing, how to utilize the capital effectively so as to develop the domestic manufacturing industry and upgrade the industrial structure. According to general industrialized countries' experience, capital deepening can make positive contribution to the manufacturing industry's quality and a country's macro economic development. But statistic data show that Chinese manufacturing industries' capital deepening process had unsatisfying economic performance.This thesis summarizes the related research on the capital allocation in the recent decades. The MPK (marginal products of capital) is emphasized to analyze 18 sectors of manufacturing from 1985 to 2005, employing the SUR (seemingly unrelated regression) method. Based on the expected MPK, further research on the efficiency of the capital allocation follows and draws the conclusion that the efficiency increases dramatically during the second period (1999-2005) compared with that in the first period (1985-1998). Meanwhile, the difference among various sectors grows steadily, the reason of which is focused on. The conclusion of this thesis is quite reasonable considering the reality of the civil environment. Contributing to promoting the industrial competitiveness, this paper proposed: improving the productivity of enterprises, industries and industry clusters as they are the main user of production factors through technique progress. Finally, the case results contribute some related policy advice of rationalizing the efficiency of the capital allocation in domestic manufacturing and upgrading the industrial structure to help it.