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Industry segmentation under environmental pressure: an optimal approach

    Feng Dai Affiliation
    ; Jingxu Liu Affiliation
    ; Ling Liang Affiliation

Abstract

Based on the Solow growth model, this paper builds a combinatorial model for economic growth under environmental pressure. Using the model, the optimal number of industries in an economy can be computed, and the “optimal number” can be regarded as a criterion for decision making concerning industry segmentation. This paper presents a critical value of the number of industries in an economy, which determines the economic output to grow (or not) after industry segmentation. The findings include the following: (1) technological progress and innovative growth cause an industry segmentation, and (2) industry segmentation is the primary approach to sustaining economic growth under environmental pressure.

Keyword : economic growth, environmental pressure, industry segmentation, optimal structure, competitive relation

How to Cite
Dai, F., Liu, J., & Liang, L. (2014). Industry segmentation under environmental pressure: an optimal approach. Technological and Economic Development of Economy, 19(1), S524-S543. https://doi.org/10.3846/20294913.2014.880081
Published in Issue
Jan 28, 2014
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