IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v12y2025i1d10.1057_s41599-025-05066-6.html
   My bibliography  Save this article

Industrial integration and value creation: a three-sector production function approach

Author

Listed:
  • Yufeng Hu

    (Tongling University)

  • Zenglai Li

    (Tongling University)

  • Youqiang Ding

    (Tongling University)

Abstract

The extension of agricultural industry to manufacturing and service industry is the development direction of the rural industrial integration. Empirical evidence demonstrates that industrial chain extension and reinforcement significantly enhance value creation. This research examines how industrial integration influences the value-added processes of the industrial chain, focusing on agricultural industry transformation. We discuss the industrial integration and its impact on value creation using a combination of theoretical and empirical methods. We develop a three-sector production function by extending the classical two-sector function. Empirical analysis verified the consistency with the theoretical model from both Chinese data and international experiences. The results represent that the integration model, planting structure, and factor productivity have elastic effects on the industrial chain’s value creation. ①The agricultural industry exerts a significant spillover effect on the manufacturing industry, and the manufacturing industry, in turn, has a markedly substantial spillover effect on the service industry. ②Factors marginal productivity in the agricultural and manufacturing industries is higher than that of the service industry. ③The integration model, the planting structure, and the quality of input factors exert significant external impacts on the industrial chain’s value creation. ④There are structural contradictions and regional imbalances in industrial integration. These findings suggest that optimizing the structure of agricultural production, promoting manufacturing, and fostering technological progress can create industrial chain value and support high-quality industrial development.

Suggested Citation

  • Yufeng Hu & Zenglai Li & Youqiang Ding, 2025. "Industrial integration and value creation: a three-sector production function approach," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    • Handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05066-6
    DOI: 10.1057/s41599-025-05066-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-025-05066-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-025-05066-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wencong Lu & Kwabena Nyarko Addai & John N. Ng’ombe, 2021. "Does the use of multiple agricultural technologies affect household welfare? Evidence from Northern Ghana," Agrekon, Taylor & Francis Journals, vol. 60(4), pages 370-387, October.
    2. Kejak, Michal, 2003. "Stages of growth in economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 771-800, March.
    3. Daron Acemoglu & Veronica Guerrieri, 2008. "Capital Deepening and Nonbalanced Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 467-498, June.
    4. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-387, June.
    5. Lu, Wencong & Addai, Kwabena Nyarko & Ng’ombe, John N., 2021. "Does the use of multiple agricultural technologies affect household welfare? Evidence from Northern Ghana," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 60(4), November.
    6. Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
    7. Montalbano, Pierluigi & Nenci, Silvia, 2022. "Does global value chain participation and positioning in the agriculture and food sectors affect economic performance? A global assessment," Food Policy, Elsevier, vol. 108(C).
    8. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    9. John Laitner, 2000. "Structural Change and Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 545-561.
    10. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    11. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    12. Sahal, Devendra, 1985. "Technological guideposts and innovation avenues," Research Policy, Elsevier, vol. 14(2), pages 61-82, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gillman, Max, 2021. "Steps in industrial development through human capital deepening," Economic Modelling, Elsevier, vol. 99(C).
    2. Hartwig, Jochen, 2012. "Testing the growth effects of structural change," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 11-24.
    3. Afolabi Tunde Ahmed & Tsimisaraka Raymondo Sandra Marcelline & Sabi Couscous Mouhamadou Nazirou, 2021. "Empirical Study of the Impact of Governance on Economic Structural Change: Evidence from Sub-Saharan African Countries," International Journal of Science and Business, IJSAB International, vol. 5(8), pages 260-277.
    4. Glawe, Linda & Wagner, Helmut, 2017. "A stylized model of China’s growth since 1978," CEAMeS Discussion Paper Series 5/2017, University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS), revised 2017.
    5. Magdalena Olczyk & Aleksandra Kordalska, 2018. "Growth And Structural Changes In Transition Countries – The Chicken Or The Egg?," GUT FME Working Paper Series A 49, Faculty of Management and Economics, Gdansk University of Technology.
    6. Sushil Kumar Haldar, 2009. "Economic Growth in India Revisited," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(1), pages 105-126, January.
    7. Garrison, Charles B. & Lee, Feng-Yao, 1995. "The effect of macroeconomic variables on economic growth rates: A cross-country study," Journal of Macroeconomics, Elsevier, vol. 17(2), pages 303-317.
    8. Sayef BAKARI, 2025. "The three-ways linkages between domestic investment, exports and economic growth: new evidence from Saudi Arabia," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(642), S), pages 37-58, Spring.
    9. Abo-Zaid Salem M, 2011. "The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004," Review of Middle East Economics and Finance, De Gruyter, vol. 6(3), pages 63-93, February.
    10. Dalgaard, Carl-Johan & Strulik, Holger, 2013. "The history augmented Solow model," European Economic Review, Elsevier, vol. 63(C), pages 134-149.
    11. Sinesipho Siswana & Andrew Phiri, 2021. "Is Export Diversification or Export Specialization Responsible for Economic Growth in BRICS Countries?," The International Trade Journal, Taylor & Francis Journals, vol. 35(3), pages 243-261, May.
    12. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.
    13. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
    14. Fedderke, Johannes W., 2018. "Exploring unbalanced growth: Understanding the sectoral structure of the South African economy," Economic Modelling, Elsevier, vol. 72(C), pages 177-189.
    15. Kashif Munir & Maryam Sultan, 2018. "Are some taxes better for growth in Pakistan? A time series analysis," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(10), pages 1439-1452, August.
    16. Dimitrios Paparas & Christian Richter, 2015. "Fiscal policy and economic growth: Empirical evidence from the European Union," Working Papers 2015.06, International Network for Economic Research - INFER.
    17. Weber, Enzo, 2009. "Common and uncommon sources of growth in Asia Pacific," Journal of the Japanese and International Economies, Elsevier, vol. 23(1), pages 20-36, March.
    18. Bos, J.W.B. & Economidou, C. & Koetter, M. & Kolari, J.W., 2010. "Do all countries grow alike?," Journal of Development Economics, Elsevier, vol. 91(1), pages 113-127, January.
    19. Tung Liu & Kui-Wai Li, 2015. "The Empirics of Economic Growth and Industrialization Using Growth Identity Equation," Working Papers 201501, Ball State University, Department of Economics, revised Jun 2015.
    20. Abu-Bader, Suleiman & Abu-Qarn, Aamer S., 2003. "Government expenditures, military spending and economic growth: causality evidence from Egypt, Israel, and Syria," Journal of Policy Modeling, Elsevier, vol. 25(6-7), pages 567-583, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05066-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.