The Empirical Analysis Of Institutional Environment Influence On Our Country's Regional Development Of Service Industry

With regard to the reason of disparity on development of service, scholars have discussed lots of factors, including GDP, level of urbanization, density of population, scale of city as well as proportion of employment. However, institutional and political factor can't be paied attention to in existing papers. An efficient economic organization is determinant of economic growth. Favorable institutional environment, effective economic system and appropriate incentive mechanism can give full play to productive potential of economic factors, promote product development and economic growth. China, at the age of transition, the regional disparities of development of service results from the difference of governmental or regional policy.This paper uses panel data from 31 provinces or cities in our country about the development of service, which is divided into three areas in the method of cluster analysis. It also usesδconvergence exponent to measure regional disparities. The institution is quantized into several variables. Marketization, the level of opening door to the outside world, government behavior and preferential policy consists of institutional factors, which lead to the disparity among areas.A model of panel regression between institution and development of regional service is made, which is estimated by FGLS. Demonstration in econometrics shows:the process of nonuniform institutional change will result in nonuniform development of regional service. Finality in the paper gives advice in developing regional service.