COMPARATIVE ANALYSIS OF FACTORS INFLUENCING INDUSTRIAL VALUE ADDED IN CHINA AND THE UNITED STATES: EVIDENCE FROM DYNAMIC ECONOMETRIC MODELS

Abstract

This study compares drivers of industrial value added in China and the United States, 2000-2024. Multiple linear regression and dynamic panel models assess fixed-asset investment (FAI), foreign direct investment (FDI), research-and-development (R&D), and electricity production (EP). R&D is most influential in the United States (β = 5.78, p < 0.001), whereas EP prevails in China (β = 3.26, p < 0.001); FDI is significant only for China. Robustness is supported by explanatory power (R² = 0.998, China; 0.974, United States). Results highlight investment- and energy-led growth in China versus innovation-led growth in the United States, guiding policy despite limitations.