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Interaction Effects of R&D Investment, Industrial Structure Rationalization, and Economic Growth in China Based on the PVAR Model

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  • Xiaohua Zhang

    (School of Economics, Hebei University, Baoding 071000, China)

  • Zhixuan Zhang

    (School of Economics, Hebei University, Baoding 071000, China)

Abstract

With the deepening of economic globalization, research and development (R&D) activities have become an important link in promoting the optimization of industrial structure and high-quality economic growth. To clarify the interaction between R&D investment, industrial structure rationalization, and regional economic growth, this paper established the panel vector auto-regressive (PVAR) model on the basis of panel data of 30 provinces in China from 2006 to 2018 and analyzed the degree of interaction among the three variables from static and dynamic perspectives. The results showed that R&D investment had a long-term positive effect on regional economic growth, and the relationship between R&D investment intensity and industrial structure rationalization was different in different regions of China. The rationalization of industrial structure had a short-term promoting effect as well as a medium- and long-range inhibiting effect on R&D investment, and in the eastern and western regions, the industrial structure rationalization had a catalytic effect on economic growth. Economic growth would restrain R&D investment in the short term, but in the long term, it would steadily promote the enhancement of R&D investment intensity, showing a “U-shaped” relationship. The results of this study will be helpful to provide differentiated policy supports to broaden the channels of economic transition and promote industrial upgrading.

Suggested Citation

  • Xiaohua Zhang & Zhixuan Zhang, 2022. "Interaction Effects of R&D Investment, Industrial Structure Rationalization, and Economic Growth in China Based on the PVAR Model," Sustainability, MDPI, vol. 15(1), pages 1-17, December.
    • Handle: RePEc:gam:jsusta:v:15:y:2022:i:1:p:545-:d:1018209
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