Service Sector Agglomeration and Industrial Structure Optimization: Evidence from China’s Resource-Based Cities

Lei Nie, Yuanyuan Wang and Yanrui Wu
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Lei Nie: Cooperative Innovation Center for Transition of Resource-based Economies and Research Institute of Resource-based Economic Transformation and Development, Shanxi University of Finance and Economics, Taiyuan, China
Yuanyuan Wang: Research Institute of Resource-based Economic Transformation and Development, Shanxi University of Finance and Economics, Taiyuan, China
Yanrui Wu: Department of Economics, University of Western Australia, Perth, Australia, http://www.web.uwa.edu.au/person/yanrui.wu

No 24-04, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: This paper employs the system generalized method of moments approach and panel data of Chinese resource-based cities at the prefecture level for the period of 2003-2019 to investigate the effects of two types of service sector agglomeration on industrial structure dynamics. The results show that an increase in “specialized agglomeration” of services would inhibit industrial structure rationalization and upgrading. However, an increase in “diversified” agglomeration of services promotes industrial structure upgrading though it also inhibits industrial structure rationalization. Furthermore, it is also found that an increase in diversified agglomeration would inhibit industrial structure rationalization in eastern cities and industrial structure upgrading in western cities but promote industrial structure rationalization and upgrading in central cities. These insights suggest the importance of fostering the appropriate form of service sector agglomeration within resource-based cities. Leveraging the synergistic linkages between the service sector and other industries could enhance the industrial structure optimization of resource-based urban economies.

Keywords: service sector agglomeration; industrial structure rationalization; industrial structure upgrading; resource-based city; China (search for similar items in EconPapers)
JEL-codes: O14 O25 O53 (search for similar items in EconPapers)
Pages: 42
Date: 2024
New Economics Papers: this item is included in nep-cna
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