The Impact Research Of Efficiency-adjusted Capital To China’s Regional Industrial Output Growth

The worldwide market demand recession, whose causes can be contributed to the financial crisis and European sovereign debt crisis, had led us to learn how to develop survival method under the restriction of resources. Our country had witnessed the necessity for the transformation of economic development style under the atmosphere that financial crisis had great impact on us. The impact coming from above two issues still exists. We had to explore the way we can utilize capital goods efficiently. The utilizing problem had attracted so many interests form both academics society and those in business. The big depression of consumption needs coming from the U.S. market and European area had forced our manufacturing industry enterprises face a huge challenge and to pass the thorough period. Exploring the way to utilize capital efficiently and gain high output growth rate at the same time was very important in both the theoretic and practical level. Based on efficiency-adjusted capital, this paper choose the northeast zone, the eastern zone, middle zone and western zone as panel cross-section ID members. After introducing the efficiency-adjusted capital into the panel model, we can utilize Cobb-Douglas output function, the estimation model was set up with purpose of specifying the impact of efficiency-adjusted capital to industrial output growth rate of each zone. After the testing of panel model setting, this paper established a variable coefficient model of the panel. The Panel model estimation results show that the impact of efficiency-adjusted capital to the growth of industrial output is greater than structure capital and intermediate input. The impact of efficiency-adjusted capital to industrial output growth rate in eastern zone is greater than the middle zone, western zones and northeast zone. The impact of structure capital to industrial output growth rate in eastern zone is also greater than other zones. Besides, the impact of intermediate input to industrial output growth rate in middle zone is also greater than other zones. Based on the empirical analysis result, this paper figures out the conclusions and then put forward five policy suggestions.