Research on Manufacturing Upgrading and Its Influencing Factors Based on Var Modeling: Evidence From Jiangsu Province in China

Ni Zhong, Ming Yu Cheng, Sheik Kyin Tey and Kuk Fai Fok
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Ni Zhong: Suzhou City University, China & Universiti Tunku Abdul Rahman, Malaysia
Ming Yu Cheng: Universiti Tunku Abdul Rahman, Malaysia
Sheik Kyin Tey: Universiti Tunku Abdul Rahman, Malaysia
Kuk Fai Fok: Universiti Tunku Abdul Rahman, Malaysia

International Journal of Decision Support System Technology (IJDSST), 2025, vol. 17, issue 1, 1-22

Abstract: Utilising data from the Jiangsu Province manufacturing sector from 2000 to 2022, this study applies the entropy value method to build a manufacturing upgrading level indicator system from three dimensions: scale, efficiency, and quality. Additionally, foreign direct investment (FDI), urbanisation rate (UR) and government intervention (GI) are selected to construct a vector autoregressive (VAR) model to empirically test the dynamic influence of the selected factors on manufacturing upgrading (MU). The results indicate an overall upward trend in MU in Jiangsu Province from 2000 to 2022. Impulse response and variance decomposition analyses reveal that UR and FDI negatively correlate with MU, while GI has a positive effect. The MU itself is the primary contributor to Jiangsu province's MU. The contribution rates of other influence factors are as follows: GI;FDI;UR.

Date: 2025
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