Economic Impact Analysis of China Shandong Province’s Distribution Industry

Purpose: The p urpose o f this study is t o quantitatively analyze the economic impact of distribution industry in Shandong Province, China to improve the understanding of the distribution industry, and to acquire its economic characteristics. Improve the awareness of the distribution industry and put forward the corresponding suggestions to the future development of China Shandong Province distribution industry. Research design, data, and methodology: This study collects data from the wholesale and retail industry, transportation industry, and internet communication industry of the distribution industry in Shandong Province, China. Then, the I-O table analysis is conducted to analyze production induced coefficients, sensitivity and impact coefficients, income and tax induced coefficients, and the overall economic impact of the distribution industry. Results: The results indicate that the total column production inducement coefficient and the total row are 2.330 and 11.699, respectively. In addition, the sensitivity coefficient is 3.209 and the influence coefficient is 0.639, the income induction coefficient of the distribution industry is found to be 0.463, and the tax induction coefficient is 0.142. Moreover, the production inducement value is approximately 10 trillion RMB, which accounts for 7.5% of the total, and the value-added inducement amount is 5.47 trillion RMB, representing 20% of the total value-added induction. Finally, the amount of income induction is 2.6 trillion RMB, accounting for 22% of the total and the tax induction amount was 873 billion yuan, accounting for 30% of the total. Implications: The distribution industry should deepen its integration with modern Internet technology in order to pursue a new development model. Also, policy-makers are suggested to provide certain policy preferential treatment, improve relevant laws and regulations, and establish market standards. In doingso, it increases residents’ income as well as local fiscal revenue.