The Study On The Impact Of Producer Services On Manufacturing Efficiency

Manufacturing, the pillar industry in China’s national economy, plays an very important role in promoting the development of domestic economic growth and enhancing the international competitiveness. However, under the pressure of international competition of “re-industrialization”, the rising cost of domestic resources and the appreciation of the Chinese Yuan, the international competitive advantage of our manufacturing is weakening and the hollowing out problem is becoming more and more serious. At the same time, manufacturing development relays heavily on resources, bringing some problems such as energy-intensive and highly polluting, and these problems have a serious negative effect on the sustainable development of economy and environment. Therefore, improve manufacturing efficiency and promote the development of domestic economy are imminent. With the development of economy, producer services has gradually become an important value source of manufacturing. Producer services can enhance the operation continuity of manufacturing, reduce productive cost, promote large-scale produce, and increase the added value in production, thus improving the manufacturing efficiency. Therefore, producer service plays an extremely important role in the process of manufacturing production and operations, the study on the impact of producer services on manufacturing efficiency is meaningful.Based on the panel data of Chinese regions’ 21 manufacturing sub-sectors between 2004 and 2011, this paper analyzes China’s manufacturing efficiency. This paper starts with combing some studies on the producer services, manufacturing efficiency as well as the relationship between the two, and then combines the mathematical model with theoretical analysis to clarify the mechanism on how producer services impact manufacturing efficiency. After that, it uses the SFA model to analyze China’s manufacturing efficiency and its regional differences. The next step is to empirically test the impact of producer services on manufacturing efficiency; and test some other important factors’ impact on manufacturing efficiency as well. Lastly, it gives some advice on how to improve manufacturing efficiency, in the hope to promote domestic economic growth.Based on theoretical and empirical analysis, this paper draws some main conclusions: firstly, China’s manufacturing shows obviously technical inefficiency, which is the main reason why the real output deviates from the optimum one; secondly, the regional manufacturing efficiency is unbalanced in our country, it shows a gradient descent between eastern, central and western regions; thirdly, producer services can influence manufacturing efficiency in two ways, including technology spillover and reducing the cost of manufacturing intermediate inputs, the first one is the main one; lastly, the participation of state-owned companies, FDI and exports have significant impact on manufacturing efficiency as well.