Journal of Applied Finance & Banking

Internet Development and Structural Transformation: Evidence from China

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• Abstract

   

  We study the effects of Internet development on structural transformation. To guide empirical work, we develop a basic model where the effect of Internet development on industrial development depends on the improvement of production technology of enterprises. We test the predictions of the model by studying the application of e-commerce, the sales revenue of basic software products and the number of computers used in China, which formed the basis of Internet development. We find that technical change and development in Internet was strongly labor-saving and led to industrial transformation, as predicted by the model.

   

  JEL classification numbers: J21, O14, O33, L86

  Keywords: Internet Development, Structural Transformation