(This abstract was borrowed from another version of this item.)"> (This abstract was borrowed from another version of this item.)">
Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/spr/frecch/v6y2011i3p413-446.html
   My bibliography  Save this article

The underdevelopment of service industry in china: An empirical study of cities in Yangtze River Delta

Author

Listed:
  • Jianghuai Zheng
  • Lili Zhang
  • Yu Wang
Abstract
The service industry in China is underdeveloped, in comparison with not only the past experience of developed countries at the similar level of GDP per capita, but also other similar developing countries at present. We define this deviation of China¡¯s service industry from the development trend in other countries as the ¡°development deviation puzzle,¡± and propose a conceptual framework based on the ¡°manufacturing cost disease¡± hypothesis to understand the reasons behind this puzzle. We test our hypothesis using the data from the urban cluster in Yangtze River Delta. The results indicate that labor productivity growth in service industry is driven by capital investment and the ¡°development deviation puzzle¡± is indeed rooted in the ¡°manufacturing cost disease.¡± Our analysis suggests that, to correct the underdevelopment of service industry, the strategy of investment-driven industrialization and urbanization must be changed. Expansion of producer services is important in increasing the intensities of human capital and foreign investment.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jianghuai Zheng & Lili Zhang & Yu Wang, 2011. "The underdevelopment of service industry in china: An empirical study of cities in Yangtze River Delta," Frontiers of Economics in China, Springer;Higher Education Press, vol. 6(3), pages 413-446, September.
    • Handle: RePEc:spr:frecch:v:6:y:2011:i:3:p:413-446
    DOI: 10.1007/s11459-011-0140-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11459-011-0140-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11459-011-0140-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Victor R. Fuchs, 1967. "City Size Differentials," NBER Chapters, in: Differentials in Hourly Earnings by Region and City Size, 1959, pages 10-16, National Bureau of Economic Research, Inc.
    2. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    3. Nordhaus William D, 2008. "Baumol's Diseases: A Macroeconomic Perspective," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-39, February.
    4. Barry Eichengreen & Poonam Gupta, 2013. "The two waves of service-sector growth," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 96-123, January.
    5. Oulton, Nicholas, 2001. "Must the Growth Rate Decline? Baumol's Unbalanced Growth Revisited," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 605-627, October.
    6. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    7. Koichi Futagami & Yasushi Ohkusa, 2003. "The Quality Ladder and Product Variety: Larger Economies May Not Grow Faster," The Japanese Economic Review, Japanese Economic Association, vol. 54(3), pages 336-351, September.
    8. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    9. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 806-817, September.
    10. Rachel Ngai & Roberto Samaniego, 2011. "Accounting for Research and Productivity Growth Across Industries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 475-495, July.
    11. Ghani, Ejaz, 2012. "Service with a Smile," World Bank - Economic Premise, The World Bank, issue 96, pages 1-6, November.
    12. Francisco J. Buera & Joseph P. Kaboski, 2012. "The Rise of the Service Economy," American Economic Review, American Economic Association, vol. 102(6), pages 2540-2569, October.
    13. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117, Elsevier.
    14. Mari Sako, 2006. "Outsourcing and Offshoring: Implications for Productivity of Business Services," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 499-512, Winter.
    15. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    16. Fixler, Dennis J. & Siegel, Donald, 1999. "Outsourcing and productivity growth in services," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 177-194, June.
    17. Qin, Duo, 2006. "Is China's growing service sector leading to cost disease?," Structural Change and Economic Dynamics, Elsevier, vol. 17(3), pages 267-287, September.
    18. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
    19. Ronald L. Moomaw, 1981. "Productivity and City Size: A Critique of the Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(4), pages 675-688.
    20. Victor R. Fuchs, 1967. "Introduction to "Differentials in Hourly Earnings by Region and City Size, 1959"," NBER Chapters, in: Differentials in Hourly Earnings by Region and City Size, 1959, pages 1-5, National Bureau of Economic Research, Inc.
    21. Jochen Hartwig, 2006. "Productivity Growth in Service Industries - Has "Baumol's Disease" Really Been Cured?," KOF Working papers 06-155, KOF Swiss Economic Institute, ETH Zurich.
    22. Markusen, James & Strand, Bridget, 2007. "Trade in Business Services in General Equilibrium," CEPR Discussion Papers 6080, C.E.P.R. Discussion Papers.
    23. Claudio De Vincenti, 2007. "‘Baumol'S Disease’, Production Externalities And Productivity Effects Of Intersectoral Transfers," Metroeconomica, Wiley Blackwell, vol. 58(3), pages 396-412, July.
    24. Segal, David, 1976. "Are There Returns to Scale in City Size?," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 339-350, August.
    25. Victor R. Fuchs, 1967. "Differentials in Hourly Earnings by Region and City Size, 1959," NBER Books, National Bureau of Economic Research, Inc, number fuch67-1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael D. Clemes & Baiding Hu & Xuedong Li, 2016. "Services and economic growth in China: an empirical analysis," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(4), pages 612-627, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zheng, Jianghuai & Zhang, Lili & Wang, Yu, 2010. "The underdevelopment of service industry in China: an empirical study of cities in Yangtze River Delta," MPRA Paper 33125, University Library of Munich, Germany, revised Jun 2011.
    2. Jaison R. Abel & Ishita Dey & Todd M. Gabe, 2012. "Productivity And The Density Of Human Capital," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 562-586, October.
    3. Ulrich Witt & Christian Gross, 2020. "The rise of the “service economy” in the second half of the twentieth century and its energetic contingencies," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 231-246, April.
    4. Sasaki, Hiroaki, 2007. "The rise of service employment and its impact on aggregate productivity growth," Structural Change and Economic Dynamics, Elsevier, vol. 18(4), pages 438-459, December.
    5. Marcus Berliant & Chia-Ming Yu, 2015. "Locational Signaling And Agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 55(5), pages 757-773, November.
    6. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    7. Irving Hoch, 1987. "City Size and US Urban Policy," Urban Studies, Urban Studies Journal Limited, vol. 24(6), pages 570-586, December.
    8. Yuan, Huaxi & Feng, Yidai & Lee, Chien-Chiang & Cen, Yan, 2020. "How does manufacturing agglomeration affect green economic efficiency?," Energy Economics, Elsevier, vol. 92(C).
    9. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
    10. Florian Lehmer & Joachim Möller, 2010. "Interrelations between the urban wage premium and firm-size wage differentials: a microdata cohort analysis for Germany," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 31-53, August.
    11. repec:rri:wpaper:200605 is not listed on IDEAS
    12. Jochen Hartwig, 2008. "Has Health Capital Formation Cured 'Baumol's Disease'? - Panel Granger Causality Evidence for OECD Countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich.
    13. Yoshiaki Ushifusa & Akinori Tomohara, 2013. "Productivity and Labor Density: Agglomeration Effects over Time," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(2), pages 123-132, June.
    14. Matthias Figo & Peter Mayerhofer, 2015. "Strukturwandel und regionales Wachstum - wissensintensive Unternehmensdienste als Wachstumsmotor?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 145, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    15. Abdul Jalil & Samia Manan & Sundus Saleemi, 2016. "Estimating the growth effects of services sector: a cointegration analysis for Pakistan," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-14, December.
    16. Du, Congcong & Cao, Yunhui & Ling, Yushan & Jin, Zebin & Wang, Shibo & Wang, Daoping, 2024. "Does manufacturing agglomeration promote green productivity growth in China? Fresh evidence from partially linear functional-coefficient models," Energy Economics, Elsevier, vol. 131(C).
    17. Elsie L. Echeverri-Carroll & Sofia G. Ayala, 2011. "Urban Wages: Does City Size Matter?," Urban Studies, Urban Studies Journal Limited, vol. 48(2), pages 253-271, February.
    18. Gashawbeza Bekele & Randall Jackson, 2006. "Theoretical Perspectives on Industry Clusters," Working Papers Working Paper 2006-05, Regional Research Institute, West Virginia University.
    19. Frank Giarratani & Gene Gruver & Randall Jackson, 2007. "Clusters, Agglomeration, and Economic Development Potential: Empirical Evidence Based on the Advent of Slab Casting by U.S. Steel Minimills," Economic Development Quarterly, , vol. 21(2), pages 148-164, May.
    20. Gabriel, Stuart A. & Rosenthal, Stuart S., 2013. "Urbanization, agglomeration economies, and access to mortgage credit," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 42-50.
    21. Antonio Ciccone & Giovanni Peri, 2002. "Indentifying human capital externalities: Theory with an application to US cities," Economics Working Papers 611, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2005.

    More about this item

    Keywords

    service sector; manufacturing sector; cost disease; labor productivity; economic development; L80; L90; L98;
    All these keywords.

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:frecch:v:6:y:2011:i:3:p:413-446. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.