THE ROLE OF THE INFORMATION TECHNOLOGY IN THE INDUSTRIAL STRUCTURE OPTIMIZATION AND UPGRADING IN CHINA

Abstract

By developing an industrial structure change model, this paper investigates the role of the information technology in explaining the process of industrial structure optimization and upgrading in China from 2001 to 2019. Then, we put forward and discuss the substitution effect and the pervasiveness effect of information technology, and deduce the theoretical propositions from the model. We use the Malmquist index method to estimate the rate of information technology progress, and then choose the genetic algorithm to calibrate the parameters of the model. The research conclusions innovatively explain how the information technology can promote the industrial structure optimization and upgrading in China based on the substitution effect and the pervasiveness effect of information technology in detail. The results point out that when the contribution of information technology to total factor productivity of the tertiary industry is higher than that of the secondary industry, the pervasiveness effect of information technology can promote the upgrading of the industrial structure. Under the comprehensive effect of the pervasiveness effect and substitution effect of information technology, the industrial structure tends to be more optimized. The further heterogeneity analysis shows that the driving effect of information technology on the optimization and upgrading of industrial structure in regions with “servitization” characteristics is more significant. It highlights policy suggestions designed to adopt innovation-driven and technology development strategy, regional industrial structure transformation and economy development strategy.