Effect Of Chongqing Producer Services In Economic Development

According to the general rules of industrial development, the industrial structurewill change from "industrial economy" to "service economy" when the economydevelops to a certain stage. In this transition, the services sector, especially thoseproducer services that are strongly associated, knowledge-intensive, high innovativeand specialized, will play an increasingly important role in promoting economicgrowth, expanding employment and optimizing industrial structure, etc. It has becomean important driving force for economic development at home and abroad today. As amunicipality in the western area of China, Chongqing focuses on creating aneconomic and financial center of Yangtze River region and commits to activating themodern manufacturing and high-tech industrial base of China. To accomplish thesegoals, the development of producer services is essential. Therefore, developingproducer services rapidly is of great significance in economic development ofChongqing.Based on the results of scholars’ relevant researches on producer services fromhome and abroad, this paper first defines the concept, classification and characteristicsof producer services. Then, from the analysis of roundabout production theory, thecycle of cumulative causation theory, value chain theory and the growth pole theory,the mechanism of action and the form of expression of producer services on economicdevelopment are analyzed. Combining with the status of the development of producerservices in Chongqing, comprehensive analyses of the role of producer services oneconomic development are made, including the contribution analysis of producerservices on economic growth, an empirical analysis of the producer services oneconomic growth, an empirical analysis of the producer services’ spillover effect onother industries, the analysis of producer services’ ability to absorb employment.Finally, some successful experiences of developing producer services in developedareas at home and abroad are introduced to make a comparison to Chongqing.According to the conclusions of empirical analyses and the lessons from thecomparison, some suggestions for the development of producer services of Chongqingare put forward.This paper attempts to conduct a comprehensive analysis of producer services foreconomic development. The producer services’ contribution to economic growth andemployment absorptive capacity are analyzed using the descriptive statistics analysis, producer services to Chongqing economic growth and spillover effects on otherindustries are analyzed using the empirical analysis. Through the analysis, someconclusions are drawn as follows:Firstly, the contribution of producer services in Chongqing’s economic growthincreases year by year. What contributes the largest to the economic growth is thefinancial industry, followed by the real estate industry and the transportation, storageand postal services industry. The leasing and business services industry, theinformation transmission, computer services and software industry, the scientificresearch, technical services and geological prospecting industry contribute less toeconomic growth.Secondly, producer services have great capacity to absorb employment. Theability to absorb employment in the various sub-sectors of producer services in orderfrom strong to weak is the financial industry, the information transmission, computerservices and software industry, the scientific research, technical services andgeological prospecting industry, the transportation, storage and postal industry, thereal estate industry, the renting and business services.Thirdly, the producer services of Chongqing play a positive role in promotingeconomic growth. Before and after2006, when the producer services output increasedby1%, the regional product gross in Chongqing will increase0.94%and0.78%respectively.Fourthly, among the sub-sectors of producer services industry, transportation,warehousing and postal service, finance and real estate industry have a positive role inpromoting the regional economic growth. When the transportation, storage and postalservices, financial services and real estate output make1%increase, the totaleconomic value will correspondingly increase by0.49%,0.21%, and0.2%inChongqing.Finally, the analysis of spillover effects on other industries shows that producerservices have positive externalities for other industries, and when the producerservices industry output increases by1%, the output of other industries will increaseby1.06%.