Modelling of index system of economic vitality during the COVID-19 epidemic

Abstract

Economic vitality is an important indicator to measure the level and potential of economic
development. The paper puts forward three social problems about economic vitality and
establishes a model to solve them. We build panel data model to analyze the influencing
factors of economic vitality. Based on the section data of Beijing, the VAR-VEC model is
established to analyze the long-term and short-term effects of economic policies on economic
vitality. The development strategy of ORT is put forward, and the scheme to promote the
growth of economic vitality is given during the COVID-19 epidemic. For the first problem, the paper preprocess panel data, and test its independence, and find that
each factor is not independent of each other. Through the correlation analysis, we found that
there is a strong correlation between the various elements. After Random Effect Test and
Fixed Effect Test combined with Hausman Test, the data panel conforms to fixed effect
model. Population change and enterprise vitality have a positive impact on economic vitality, the influencing factors are 0.01 and 0.07 respectively. We put forward the strategy of
adjusting the overall structure of enterprises to improve economic vitality. For the second problem, the paper select the section data of Beijing city and construct the
VAR-VEC model. Based on ADF unit root test and Johansen cointegration test, we find that
there are at least three cointegration relationships between time series. We use Ais-Sc
Criterion to determine the order of delay as the third order. We use OLS estimation method to
get the coefficients of VEC Model. Through the IRF response, we find that the long-term
impact of economic policy on economic vitality is positive correlation effect. Due to the
effect of experience accumulation, the economic vitality presents a W-shaped trend. For the third problem, the paper use the minimum average deviation method to preprocess the
index data, and get 9 representative indexes. We extract two main factors by factor analysis
and build an index system of economic vitality. The economic vitality of each city from 2009
to 2017 is calculated according to the index system. Beijing, Shanghai, Guangzhou and
Shenzhen often rank first, while Kunming and Dongguan often rank last. Based on the same
data, the panel data model test results are similar to index system. For the fourth problem, we review the previous conclusions and put forward the ORT
development strategy to improve economic vitality based on the established model