Rural Economic Development Based on Shift-Share Analysis in a Developing Country: A Case Study in Heilongjiang Province, China

Abstract

Identification of local priorities within each potential sector and implementation of a targeted development policy would definitely accelerate rural economic growth. In this sense, it is useful to examine each region’s industrial structural evolution compared to the whole economy and aggregate industries. Shift-share analysis has been confirmed as a useful method to measure regional economic differences and analyze the contribution of industrial structure. This paper selects five representative counties in Heilongjiang province and applies shift-share decomposition to analyze the change in rural economic development from 2000 to 2018. The change of economic growth in each selected county is decomposed into three components: national growth effect, industrial structure effect, and competitive effect, taking the national level as the reference. The results showed the following: (1) the trend of rural economic growth fluctuated greatly for nearly 20 years, distinguished by a mismatch of industrial structure with competitiveness for the selected counties; rural economies with an inappropriate industrial structure did not experience strong growth, despite high competitive potential. (2) The low-end agricultural structure and secondary industry structure led to the loss of each competitive effect; the tertiary industry structure based on economic structure servitization was rational, but the competitive effect did not work out. (3) Finally, this paper provided differentiated suggestions in accordance with local resources and priorities of the selected counties, so as to avoid excessive convergence and the lack of characteristics in industrial structure in rural transformation.