Research On Inter-urban Interaction Between Producer Services And Manufacturing Industry

Today's world,especially in more economically developed countries or regions,industries are increasingly presenting a tendency:with continuous separation of manufacturing internal services along with the refinement of internal services,producer services have been enjoying relatively rapid development and increasingly featuring a gathering in cities(especially the metropolis).At the same time,the manufacturing industry,especially the ordinary and low-end manufacturing,is keeping shifting from metropolis to suburbs,even to medium and small cities.This way,the interaction between producer services and manufacturing industry has gradually evolved into industrial interaction from inside a city into between cities.This will largely affect the distribution of the interests and orientation of industrial development in every cities,and then cause evolution of the "core periphery" pattern and reorganization of the city's hierarchy.This paper will focus on the formation mechanism of the inter-urban interaction between producers services and manufacturing,as well as constraints and a series of resulting impact,to analyze the internal mechanism behind the industry interaction by a variety of methods,to analyze its impact on the interests pattern of the cities,and then puts forward relevant policy recommendations.Interaction between inter-urban producer services and manufacturing means:in the context of economic integration,firms engaged in producer services or manufacturing are spontaneously re-seeking the optimal allocation of factors of production in a gesture to pursuit profit maximization under the guidance of the market mechanism between cities(even between regions,between countries).So industrial division is formed by means of industrial agglomeration between cities.——some cities focus on(producer)services,while others concentrate on the development of manufacturing.And both are interdependent and mutually reinforcing,thereby enhancing the industrial competitiveness of the entire region.This paper attempts to explain the formation mechanism and influence among the urban industrial interaction from a different perspective with five interrelated hypotheses or models."Space transaction cost hypothesis" thinks that,from the view of evolutionary origin,the formation of interaction of inter-city producer services and manufacturing is a joint result of extending its spatial boundary When the changing external conditions of enterprise lower space transaction costs.The formation of a unified market arising from regional economic integration makes it possible for both industries to restructure between two cities,accordingly making the market increasingly competitive,forcing the two types of enterprises to rebuild the entire value chain in terms of space,and further bringing the collaboration and adjustment in space between producer services and manufacturing.In this process,the rapid development of science and technology(including modern transportation technology,communications technology,information transmission technology,etc.)has shortened communication distance and time between businesses,making long-distance producer services possible,and followed by the evolution of business organizational structure and the emergence of a variety of organizational forms,such as clusters,enterprise networks,headquarters-branches and so on.They have played a significant role in promoting industrial gathering and diffusion in the space.In addition,not only does the division of labor between producer services and manufacturing industry become increasingly obvious,but producer internal services division is also increasingly refined,leading to producer services companies providing more and more services to each other and creating a huge internal market demand inside them(which also makes the producer service industry not entirely dependent on the development of the manufacturing sector).These factors effectively reduce the space transaction costs(include market barriers,transportation costs and information exchange costs etc.),and expand or enhance the breadth and location independence of the producer services,and so make the producer services and manufacturing increasingly isolated in space and more effectively interactive in a wider area."City of comparative advantage hypothesis" thinks that,from the industrial level,the formation of inter-urban industrial interaction is in line with the principle revealed by city comparative advantage theory.Different cities form their own characteristics and advantages based on different resource endowments.Some are more suitable for the development of manufacturing,while others are more suitable for the development of producer services.Thus the formation of a division of labor between cities and the formation of different interactive modes appeared based on their resource advantages.In the context of globalization,what kind of major industry a city prefers to develop is affected by division of labor of the global value chain,and thus the rules and processes of its own industrial development will be changed greatly."Enterprise location model" thinks that,from the micro level,the formation of industrial interaction between cities results from the companies' geographical reconstruction of production factors in the pursuit of maximizing the benefit when the external environment has changed.By comparing costs and benefits brought about by choosing plant location in different cities before and after the market integration,micro-actors--manufacturers and producers of services companies find that the interaction between urban producer services and manufacturing,under certain conditions,is more important for business than within the city."City reputation hypothesis" thinks that,the formation of inter-city industrial interaction can be a result of transition of producer services locating.In the presence of serious information asymmetry among producer services,especially high-level producer services,the reputation of a city as well as price level differences has become an important indicator of the level and quality of its service,making it possible for the businesses in pursuit of maximizing the benefits to effectively overcome the plight of asymmetric information during the time of transaction."City reputation hypothesis" exceeds the previous the classic assumed-the proximity principle and the principle of gathering for the spatial orientation of producer services and manufacturing,bringing the spatial orientation of producer services out of the"halo" shrouded in manufacturing and forming an effective interaction with manufacturing in accordance with its own law of development in a broader geographic space."limited number of service centers city hypothesis" thinks that,industrial interaction among cities will make the original "manufacturing center-agriculture periphery" pattern gradually evolve into the new "service center-manufacturing periphery" equilibrium,showing a feature of "limited number of service center city".Industrial interaction among cities causes reorganization of city hierarchy,and its reputation as the manufacturing center is gradually lost,while the status of the service center city is rising and occupies the high-end of urban hierarchy.The study object of this paper-industry interaction among cities,not only can multi-angle to explain,and has important theoretical research value,but also performs vividly in reality,and has important practical significance.Preliminary research on some cases at home and abroad has found that the higher the economic development level stands,the more obvious the interactive effect between urban producer services and manufacturing is.In some areas of China,for example measurement test showed that the level of interaction of the regional producer services and manufacturing was uneven between cities.There exist certain industrial synergies between cities,but this relationship is still relatively weak.Also it is difficult to test the co-integration through a cause-effect relationship and the real benign interaction has not come into being..As for the correlation between evel of interaction and the city's economic growth,it varies from city to city.At least on the whole,the correlation is not clear,indicating that industrial interaction among cities has not yet become an important driving force of economic growth due to the weak industrial interaction among cities,and that a real rational division among cities has not been formed.Because of only a small number of a regional service center and uneven interests distribution,fierce competition centering around the development of producer services will undoubtedly occur among cities when the role of market mechanism does not function properly and sufficiently,which will surely have a profound impact on regional economic development.Based on this,industry coordination between cities is very important,especially for transition economies.As for China,it is necessary to establish a good industrial development and coordination mechanisms to minimize the government's administrative intervention for industrial development through policy guidance at both regional and national levels,creating a unified internal market and giving full decisive play to the role of the market mechanism.And further mergers,restructuring and upgrading of different businesses and industries can be implemented inter-city,inter-regional(or even cross-border)under the guidance of market.Therefore a reasonable division of labor and the effective interaction in space between producer services and manufacturing sectors are to be achieved and the competitiveness of the industry is to be improved.