Economic policy uncertainty, resource endowments and industrial structure transformation

Abstract

This article examines the impact of economic policy uncertainty (EPU) on the industrial structure using panel data of 275 prefecture-level cities in China from 2003 to 2018 with the mediating effect of resource endowments. We find that uncertainty about economic policy has an inverted U-shaped relationship with industrial structure. Moreover, the positive relationship between EPU and industry structure is more prominent for cities with abundant natural resources. In addition, from the perspective of the three industries, EPU has an inverted U-shaped relationship with the primary and tertiary sectors and a U-shaped relationship with the secondary sector. EPU has a positive threshold effect on the rationalization of industrial structure. These results suggest that local governments should consider EPU to promote industrial structure transformation and strengthen its governance capacity to reduce the negative impact of EPU.

Keywords:

• Economic policy uncertainty
• resource endowments
• industrial structure
• mediating effect

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Data source: https://epi.envirocenter.yale.edu/

2 Data source: EPU Index (http://www.policyuncertainty.com/)

3 Data source: Answers of the National Bureau of Statistics of China spokesperson to questions raised by reporters on the operation of the national economy in the first three quarters of 2019 (http://www.stats.gov.cn/tjsj/sjjd/201910/t20191018_1703403.html)

Additional information

Funding

This work was supported by the National Natural Science Foundation of China (NSFC No. 71774053).

Notes on contributors

Fangyu Ye

Conceptualizaion, Fangyu Ye, and Jingjing Deng; methodology, Jingjing Deng; software, Bibang Gong; formal analysis, Fangyu Ye; resources, Jingjing Deng; data curation, Zhiyao Zeng; writing —original draft preparation, Fangyu Ye; writing—review and editing, Jingjing Deng; visualization, Bibang Gong; supervision, Zhiyao Zeng.