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Service Sector Agglomeration and Industrial Structure Optimization: Evidence from China’s Resource-Based Cities

Author

Listed:
  • Lei Nie

    (Cooperative Innovation Center for Transition of Resource-based Economies and Research Institute of Resource-based Economic Transformation and Development, Shanxi University of Finance and Economics, Taiyuan, China)

  • Yuanyuan Wang

    (Research Institute of Resource-based Economic Transformation and Development, Shanxi University of Finance and Economics, Taiyuan, China)

  • Yanrui Wu

    (Department of Economics, University of Western Australia, Perth, Australia)

Abstract

This paper employs the system generalized method of moments approach and panel data of Chinese resource-based cities at the prefecture level for the period of 2003-2019 to investigate the effects of two types of service sector agglomeration on industrial structure dynamics. The results show that an increase in “specialized agglomeration” of services would inhibit industrial structure rationalization and upgrading. However, an increase in “diversified” agglomeration of services promotes industrial structure upgrading though it also inhibits industrial structure rationalization. Furthermore, it is also found that an increase in diversified agglomeration would inhibit industrial structure rationalization in eastern cities and industrial structure upgrading in western cities but promote industrial structure rationalization and upgrading in central cities. These insights suggest the importance of fostering the appropriate form of service sector agglomeration within resource-based cities. Leveraging the synergistic linkages between the service sector and other industries could enhance the industrial structure optimization of resource-based urban economies.

Suggested Citation

  • Lei Nie & Yuanyuan Wang & Yanrui Wu, 2024. "Service Sector Agglomeration and Industrial Structure Optimization: Evidence from China’s Resource-Based Cities," Economics Discussion / Working Papers 24-04, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:24-04
    Note: MD5 = ce75e8abb32b2f3d65cb725a9bd7f9bb
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    More about this item

    Keywords

    service sector agglomeration; industrial structure rationalization; industrial structure upgrading; resource-based city; China;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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