Research On The Role Of Producer Services Cluster In The Agglomeration Of Manufacturing Industries

Since the 1980s, producer services dominate in the development of service vector gradually, and become a pillar industry of the national economy in the developed countries. Oherwise,the Chinese produce services have not risen, but declined. Meanwhile, China’s manufacturing industry is facing a critical period of transformation and upgrading, urgent producer services as advanced intermediate inputs of production factors to support the transformation and upgrading of the products throughout the industry. In this context, this paper reviews the industrial cluster theory, interactions and interactive location theory between producer services and manufacturing. And then combined with the stylized facts of manufacturing locations around Jintong producer services in the Yangtze River Delta cluster, this paper presents an idea to study the role of producer services cluster in the agglomeration of manufacturing industries from the perspective of product diversity in the producer services cluster. We treat producer services as intermediate inputs into the production system of manufacturing sector, and thus consider the impact of the producer services cluster on the manufacturing industries’ geographic features.The main conclusions of this paper are as follows:1) Product diversity of producer services can enhanche the efficiency of manufactring production. Thus the final production sectors have an incentive to use a variety of services to enhance the efficiency of final manufacturing production. 2) When producer services have a serious similar iceberg trade cost, the manufacturing companies would cluster aroud the producer services cluster to seek for efficiency produced by the product diversity in the producer serviecs cluster. The more serious the similar icerberg trade costs are, the more he manufacturing companies would have an incentive to do so.3) If producer services between regions have more homogeneities, the region which has comparative advantage of the sclae and types of producer services is more likely to drive manufacturing agglomeration. Conversely, when the inter-regional product heterogeneity is stronger, even if the region where the producer service cluster has comparative advantage of product diversity, nor can cause manufacturing cluster in this region because of irreplaceability of these products.Based on the above findings, the paper made the following analysis about the role of the producer services with comparatvie advantage of product diversity in the promotion of manufacturing agglomeration. The purpose of forming a producer services cluster with comparatvie advantage of product diversity is that to meet the desire of manufacturing companies to seek the efficiency due to product diversity on the one hand, to reduce the similar iceberg cost brought by the intention to seek more diversity of producer serivces imputs on the other hand. Therefore, the manufacturing sector shows the spatial characteristics of agglomeration around the producer service cluster with comparatvie advantage of product diversity. Besides, the more serious similar iceberg costs are, the more the reducement by the producer services cluster is. Manufacturing companies have more intense to gathering around producer services cluster.The innovation of this study is that the feasbility of the development stragety that we can make use of producer services cluster with product diversity to promote manufacturing industry aggregate and upgrade as a whole, thus to enhance the competitiveness of national industries have been proved by the theoretical analysis based on the perspective of product diversity. But there’re still some shortcomings to be further improved. For example, knowledge-intensive characteristic with producers services and dynamic equilibrium problem between sevices and manufacturing sectors are not included in the theoretical model.