Factor Inputs And The Results Of Changes In The Empirical Research On The Impact Of Economic Growth

Last 30 years, China has experienced economic growth at an average rate of more than 10% a year, which is approved by countries around the world. However, along with the huge economic achievement is the prices of excessive input and consumption of production factors such as labor and raw materials, plus the irreversible damage to the environment. Such economic growth pattern is unsustainable for China. Therefore, China's central government recognizes the change of economic growth pattern as an strategic object that the growth pattern should be transited from decentration to concentration. As industries play an important role in macro economies, the changing process also means the transformation and upgrading of the industrial structure.China's economy has come into a new stage of structural transformations. Based on the experience of other countries in development, economic development presents distinct characteristics in different developing stages.The major objects of development and dominate industries vary in different stages. Therefore, the problem of structural transformation occurs in every phase of economic growth. For countries with underdeveloped industrial structure like China, it will be a long term struggle to upgrade industrial structure and allocate economic resources efficiently. Therefore, research on the relationship between China's structure transformation and economic growth is important for providing correct upgrading strategies and promoting economic growth.This paper, in the first step, applying Solow production function to tertiary industries, make a regression between tertiary industries'output and the input. Through adding up right lagged variables to the explanatory term, the regression equations present good statistical properties, the residual series also tend to be stationary. On basis of the data acquired in the first step, we calculated the total factor production (or named solow residual in some literatures) across industries over years, and analyze the trend and reasons for technical improvement. At the last section of empirical research, we extend analysis to dynamic conditions.By vector auto regression model, we conduct an research on the effect of industrial structure changes on the economic growth based on macro economic data between 1979 to 2008,and summarize the long run trend of the relationship between industrial structure changes and economic growth.