Empirical Study On Economic Growth Of Service Industry Of Wuhan

21 century is a society of urban economy and city economy is service economy. Service industry is also called tertiary industry which is industry besides the first and second industry. Now the level of its development is identified as important sign of a country or district economic growth. As we can see from international experience as well as national practice, without a sound industry, the steady growth of national economy, the optimizing of industrial structure and the enhancement of employment can't be realized. The service industry output of the west countries occupied 60% -70% of its GDP in the past ten years. However, in 2002, the service industry output of China occupies 33.5% of its GDP and the service industry output of all cities of China occupies beyond 84.8% of the whole country. So, accelerating the urban service industry is very helpful to solve the low level state of sevice industry in China. Most previous studies have focused only on the industry or agricultural sectors, as for service industry economic growth empirical studies are less, moreover, productivity studies have been done less much to urban service industry, perhaps due to the limitation of statistics of service industry, the discrepancy of statistics data and the so many various industries of service industry. Wuhan is one of the extra cities in central section of China, being representative. So it is significant and important to research its economic growth of service industry.This paper is based on some theories of economic growth, service industry, institution economics and human capital. Some study methods have been taken in this paper such as dynamic state analysis, comparative analysis, econometric method, factor analysis, curve estimation and other methods to give a comprehensive empirical analysis on the economic growth of Wuhan's service industry.Firstly, this paper gives an observation of relative theories as the study basis. Secondly, this paper gives a review of output and labour force of economic growth from 1978 to 200 3 and from four aspects including size structure efficiency and development potentiality to designs a comprehensive evaluation targets system. Principal component analysis method is used to give the position of Wuhan's service industry in 19 important cities of China. Thirdly, a suitable econometric model containing human capital and institutional factor is designed to find out the quantitative relationships between the variables and the output ofservice industry of Wuhan, and then work out the contribution rate of such factors as material capital, human capital, institutional factor, percent of urban and other factors influencing the economic growth of Wuhan's service industry. Forthly, this paper expounds the trend of the internal structural changes of service industry in Wuhan from some aspects including output strcture, relative productivity and industrial contributions rate. By establishing models, some internal sectors of service industry of Wuhan are forecasted. At last, corresponding suggestions are provides according to the analysis above and the next five year plan of economy development of Wuhan, in order to develop service industry of Wuhan from some aspects as harmonizing the relationship of industries, institution innovation and promoting industrial competitiveness.