Influencing factors of the industrial economic growth and its regional differences in China

Abstract

Capital investment, labor input, financial investment and technological progress are factors that affecting the growth of industrial economy. In order to find the different effects on industrial economy, stimulating effects of these factors in east, central and western regions were estimated by using Cobb-Douglas production function. There are regional differences in the effects of the factors mentioned above. The main driving forces of China's industrial growth are still capital investment and labor input. The capital investment plays a larger role in the eastern and western regions, compared with the central region. The effect of public financial policy is not significant in the western region. The technological progress has not become the main driving force of China's industrial growth. Thus, the central region should increase the multiplier effect of the fixed asset investment, while the western region must improve the efficiency of fiscal spending through consolidated supervision.