Study On The Effect Of The Co-agglomeration Of Producer Services

Industry agglomeration is a phenomenon of economy developing to certain extent. It is one of the foundations in creating urban industrial competitiveness. As an important pivot point of urban economy, manufacturing industry has already obviously appeared agglomeration status. With the specialized development of manufacturing industry, the phenomenon of internal service outsourcing is quite common. Producer services become independent and gradually grow into a critical industry, which show obvious agglomeration status characteristics. When manufacturing industry, producer services and other services develop to a certain extent, it will appear co-agglomeration phenomenon. In essence, it is the value chain combination between different industries. Co-agglomeration is not simple add of several urban industries, but rather deeply integrate among different industries. From view of urban economy sustainable development, we can intensive use of limited space and resources, also promote reasonable and co-agglomeration in the different industries. For co-agglomeration of producer services and manufacturing industry, it has not formed a systematic and complete theory at present. Based on theories at:the present time, this article researches coordinate distributed between two industries from industrial and space, also explores the formation of co-agglomeration and the mechanism to the economic growth.Yangtze economic zone is a strong base in manufacturing industry which has formed obvious manufacturing agglomerate regions, such as the Yangtze River Delta city circle, the Chengdu-Chongqing economic circle. Also producer services in the regions have achieved a good momentum of development. Along with changing of the world economic situation, Yangtze economic zone should change development model of manufacturing industry located in the bottom of world value chain. We can make use of the development of service industry, especially producer services, then it will upgrade industrial structure and form our own high industry value chain.This article use location entropy and input-output model analyzing data, which can analyze the relationship among manufacturing industry, producer services and other services of the Yangtze River economic zone in 2005 and 2015, also can investigate the agglomeration level and evolvement status. The study found that producer services have a close relationship with manufacturing industry. Especially, traditional traffic, transport, storage and post services of producer services still have the strongest relationship with manufacturing industry. But, the material consumption in the entire national economy is relatively larger, while service consumption is relatively little. Because of low agglomeration level of producer services at present, there has not been formed apparent cluster. Secondly, by using data from 108 prefecture-level cities of the Yangtze economic zone 11 provinces under Stata 12.0 software metrology regression, we can examine agglomeration effect and co-agglomeration effect of producer services. The outcome from regression shows the agglomeration of manufacturing industry has a positive effect on economic growth and industrial margins improvement. But so far for interaction factor, it is not as useful as producer services. Producer services fall behind the economic development need, having a negative effect on economic growth. Co-agglomeration between manufacturing industry and producer services has a positive effect on industrial margins improvement. Meanwhile, Co-agglomeration effect between other service industry and producer services should be analyzed in a concrete way.Based on theoretical and empirical model studies, this paper draws some conclusions. Firstly, manufacturing industry is the main driver for the Yangtze economic zone economic development, producer services can create higher value by working closely with manufacturing industry. Secondly, although producer services can significantly improve industry profit margins, they have yet to reach the requirement of economic development, owing to strict controls, high market entry threshold and lacking of inputs. Thirdly, co-agglomeration between manufacturing industry and producer service has positive effects on economic growth. The combination of integrated services and specialized manufacturing can save the transaction cost and achieve optimized industry convergence, also it can promote economic transition. Fourthly, Consumer services located in the terminal of industry chain, they have short term promotive effect on economic growth, but can’t keep long. Under these conclusions, this paper puts forward some feasible measures. Firstly, by accelerating the development of the producer services, it can construct producer services cluster. Secondly, by strengthening co-agglomeration of manufacturing industry and producer services, it can push up industrial chain from low-end to high-end. Thirdly, by optimizing service industry internal structure, it can improve the service level and service quality. Lastly, by actively promoting opening-up level, it can improve the level of competition of producer services in the Yangtze River economic zone.