Industry Structure and Economic Growth: Evidence from Henan Province in China

Based on the statistical data released by Henan Statistical Bureau in China, over the period 2000-2008, this paper empirically investigates the relationship between economic growth and industry structure including primary industry, secondary industry, and tertiary industry using the compensative GM (1, N) model in the grey theory. This paper applies the Principle of Least Square Method to estimate the parameters of the system equation. Research results show that the compensative GM (1, N) model established in this paper has a high precision, and could provide valuable information to policy makers in their efforts to make effective economic policies for promoting economic growth.