Regional differences between China's telecom industry development and economic growth -An empirical study based on eastern and western panel data

Through establishing a dynamic panel data model and based on panel data which were calculated at 2000 constant prices from 2000 to 2011 of 23 provinces in the eastern and western China, this paper studies the causal relationship between telecommunications development and economic growth of eastern and western China, using the method of unit root test, the differential method and Granger causality test. The empirical results show that there is a causal relationship from gross regional product to the direction of the telecom business volume in the eastern China, but not in the western. This result means that the improvement of telecommunications infrastructure is not enough to stimulate local economic growth, while the western region's economic growth is not significantly driven by the development of the local telecom industry as well.