Threshold Effect of Industrial Structure Change on Economic Growth

Based on the framework of neoclassical growth theory, this paper constructs a time series threshold co-integration model to test and analyze the impact of ratio of the tertiary and the secondary industry, the tertiary and the primary industry, the productive service industry and the service industry on economic growth during 1979-2015 in China. The following conclusions are drawn: (1) there is a threshold effect of industrial structure change on economic growth. The time node of the threshold effect is about 2009-2010. (2) threshold effect of industrial structure on economic growth is mainly achieved by changing the output efficiency of labor factors. After 2009-2010, the labor output efficiency declines significantly, while the capital output efficiency remains basically unchanged. The conclusions of the study show that the premature development of service industry and the excessive non-productive tendency of service industry development are very detrimental to the sustained growth of China's economy in the middle and late stages of industrialization. This paper provides some policy suggestions, such as continuing to promote the mechanization and large-scale development of the agricultural industry, deepening the development of manufacturing industry, and focusing on the development of productive services, to maintain the high-speed economic growth of China.