JACIII Vol.24 No.4 pp. 502-508
doi: 10.20965/jaciii.2020.p0502


The Influence of Factor Price Distortions on Economic Structure – Based on Time-Varying Elasticity Production Function Model

Shangfeng Zhang, Qi Fang, Huiru Ren, Chun Zhu, Jingjue Xu, and Lang Hu

College of Statistics and Mathematics, Zhejiang Gongshang University
18 Xuezheng Street, Xiasha Education Park, Hangzhou, Zhejiang 310018, China

Corresponding author

October 25, 2019
January 12, 2020
July 20, 2020
factors price distortion, industrial structural upgrading, time-varying elasticity production function model

Based on the time-varying elasticity production function model, we calculate factor price distortions, and study their influence on the rationalization and optimization of industrial structure. We find that the impact coefficient of capital, and labor factor price distortions on the rationalization of industrial structure are −1.2087 and −0.3147 respectively. Additionally, the impact coefficients on the optimization of industrial structure are −0.2333 and −0.0718 respectively. These results demonstrate that capital and labor factor price distortions are significantly negative for the rationalization and optimization of industrial structure. Therefore, it is imperative to reduce factor price distortions, and support industrial structure upgrades to promote supply-side structural reform.

Effect of industrial structure upgrade

Effect of industrial structure upgrade

Cite this article as:
S. Zhang, Q. Fang, H. Ren, C. Zhu, J. Xu, and L. Hu, “The Influence of Factor Price Distortions on Economic Structure – Based on Time-Varying Elasticity Production Function Model,” J. Adv. Comput. Intell. Intell. Inform., Vol.24 No.4, pp. 502-508, 2020.
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