Transformations  in
Business & Economics

HOW DOES HUMAN CAPITAL PROMOTE INDUSTRIAL STRUCTURE UPGRADING: AN EMPIRICAL STUDY BASED ON CHINESE PROVINCIAL PANEL DATA
Xin Xiang, Yuanxiang Zhou

ABSTRACT: Industrial structure upgrading (ISU) is a similar pursuit around the world. This study aims to examine the association between ISU and human capital (HC) using panel data from 2000 to 2016. This paper further elucidates the theoretical basis of HC structure, promoting the dynamic evolution of ISU, and uses the provincial dynamic panel and spatial error model to examine the promoting effect and HC spatial spillover structure on the ISU and rationalization of industrial structure. Our results reveal that HC structure promotes the ISU and has a substantial constructive effect on the industrial structure rationalization. Further by conducting the robustness test of differential generalized moment estimation, it was found that data tailing and reconstruction of advanced industrial structure indicators and the structure of HC has internal consistency with the dynamic progression of the ISU. Results revealed that HC structure has spatial spillover to the ISU and further showed that HC structure also has spatial spillover to the restructuring of industrial structure. The authorities should focus on the training and education promotion to create a concrete substance for the future evolution of the industrial structure.

KEYWORDS:  fiscal decentralization, economic growth, human capital structure, advanced industrial structure, rationalization of industrial structure.

JEL classification:  L6, R1, O1