A Study on the Dynamic Relationship between Cultural Industry and Economic Growth

The cultural industry is treated as the sunrise industry in modern society. It has taken an increasing role in promoting economic growth. Due to this, this paper attempts to explore the dynamic relationship between cultural industry and economic growth. On the grounds of Cobb-Douglas production function, the cultural industry is regarded as a determinant such as labor and capital to impact economic growth. Meanwhile, the quarterly datum form the first quarter of 2000 to the fourth quarter of 2017 are employed to conduct an empirical analysis under the vector error correction model. The GDP is treated as an independent variable. The capital input, the labor input and the total output of cultural industry are treated as dependent variables. Furthermore, a menu of statistic approaches such as the co-integration test, the Granger causality test, the impulse response function and so on will be used to testify the dynamic relationship between cultural industry and economic growth. Via the Johansen co-integration test, the results report that the cultural industry has a positive effect on economic growth. Through the vector error correction estimation, the results also report that the cultural industry also has a positive effect on economic growth, but less than that of the Johansen co-integration test. This paper provides a view that the cultural industry is a kind of a determinant to promote economic growth. Therefore, the China’s government should pay much attention to the cultural industry construction.