A Study on the Effects of Industrial Structure Changes on Innovation Capacity

Abstract

This article which is based on the measurement of rationalization and upgrading of industrial structure explores the effects of industrial structure changes on regional innovative capacity by using econometric model that is built by thirty regions’ balanced panel data from 1997 to 2011 in China. The empirical results show that the rationalization and upgrading of industrial structure would promote the regional innovation capacity and at the present stage the contribution which rationalization makes to regional innovation capacity is greater than that of upgrade. Meanwhile, effective demand and finance demand have been playing a positive role in promoting innovation ability, while investment growth, government intervention in economy and openness represent negative effects on regional innovation ability.