Government Behavior,Comparative Advantage Strategy And Industrial Ownership Structure

Since the reform and opening up, the industrial ownership structure in different region is notthe same. In the context that local governments intervene in the regional economy actively, theindustrial ownership structure is influenced by the development strategies of the localgovernment to a certain extent. Therefore, this article researches how the local officials, who isencouraged by job promotion, select the development strategies and analyzes what kind ofimpact will be caused by different kind of development strategies on the industrial ownershipstructure. At the same time, based on the provincial panel data, the empirical examination isdone to test the theoretical hypothesis. The results show that if GDP increase serves as themain assessment criteria for promotion incentives, all the officials will choose to developcapital-intensive industries, though they belong to different regions. However, the relativeintensity of capital and labor is not like in different region, the strategies to give priority todevelop capital-intensive industries in different region will be different kind of developmentstrategies. Moreover, the empirical examination has confirmed the impact of developmentstrategies on the industrial ownership structure. If the development strategies don’t follow thelocal comparative advantages, the proportion of non-state-owned industries will be low, andvice versa. The end of this paper will give policy recommendations to local government tochoose the appropriate development strategies.