The Role of Government in Manufacturing and Service Sectors and the Contribution to Economic Growth-A Comparative Study between.pdf

1、Our study focuses on two issues by comparing China and European Union.Firstly, we estimate the impact of two economic sectors, manufacturing sector and service sector,and government intervention on growth of aggregate ou

2、tput (i.e., GDP) in China and European Union.And, secondly we compare the differences between these effects in China and European Union.We have used a panel data over the period 1996-2010 and analyzed using the fixed eff

3、ect estimates.We employed three regression models to examine the relationship between each economy.The first model looks into the effects of manufacturing and service sector and the influence of government on the growth

4、of overall economy.The second model looks into the effects of service sector and government intervention on manufacturing sector growth.And, the third model analyses the effects of manufacturing sector and government inf

5、luence on the service sector growth.We have used SVC (value added for service sector) as an independent variable in second model and MFG (value added for manufacturing sector) as an in dependent variable in third model.T

6、hese variables have been used to justify the theory which suggests a synergetic effect between the two sectors.Our results show that government intervention has a negative correlation on the growth of aggregate output of

7、 Chinese economy as well as manufacturing and service industries.On the other hand, the government intervention has a positive correlation on the growth of aggregate output of overall economy of European Union and so for