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Quantitative Analysis of Granger Causality between Technological Progress and Industrial Structure in Undeveloped Areas

Zhang Li

Abstract


Technological progress is the fundamental driving force for upgrading the industrial structure. Taking the example of a province of China, this article focuses on quantifying the relationship between technological progress and industrial structure of underdeveloped areas. Using Cobb–Douglas production function, the author calculates the ratio of technological progress. Co-integration tests indicate that there exists the long-term stable equilibrium relationship between technological progress and industrial structure. Granger causality tests show that the technological progress is the reason for the industrial structure optimizing, but the latter is not a reason for the former. Therefore, it is of practical significance for underdeveloped areas with technological backwardness to rely on technological progress to promote industrial structure optimizing.

Keywords


time series analysis, co-integration analysis, Granger causality, technological progress, industrial structure.

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