Home Market Scale And Total Factor Productivity In The Service Sector

Beginning in the 1980 s,the world economy began to transition to a service economy.Currently,the service industry accounts for more than 70% of global GDP,the world has entered the era of the service economy.In addition,the service industry has become the leading force in the global technology innovation.Under the background of the development of international service industry,China's service industry has gained rapid development,service industry increasing value and service types are increasing,the overall development trend is good.However,compared with the developed countries,China's service industry is increasing in the proportion of long-term hovering around 40%,or even less than some of the less developed countries,and regional development imbalances have been revealed.Due to limited resources,China's economic growth is not likely to continue to rely on the input of production factors,to seek alternative labor and capital elements of the method;through the promotion of total factor productivity(TFP)is the breakthrough point of sustainable economic growth in China.To improve the total factor productivity of service industry,the key is to form the Chinese elements of innovation;this feature is inseparable from our huge home market scale.In view of this,this paper expounds the related concepts and calculation methods of total factor productivity of service industry and local market scale.First of all,the relevant literature is sorted out,mainly from the perspective of local market effect,service industry innovation and local market demand and so on.Secondly,by analyzing the current situation of China's service industry and the impact of demand factors on the development of China's service industry,this paper summarizes the different situation of the development of the service industry.On this basis,the paper gives a theoretical research on the growth of the service industry from the perspective of theoretical mechanism and mathematical analysis.Finally,we use nonparametric Malmquist productivity index system estimated the 2003--2013 Total-factor productivity in China's service industry,Based on the panel data of service industry,we can decompose the total factor productivity index into technical efficiency index(EFCH)and technological progress index(TECH).Studies have shown that,in order to promote innovation and market size hypothesis is established,the home market scale can bring to enhance the service industry total factor productivity.There are some differences in different industries analysis.The role of the local market size of the industry is more sensitive to the degree of technology intensive.From the perspective of mechanism,the positive effect of local market size on productivity is mainly through human capital and capital density,while the impact on productivity and technological progress is limited.For the results of theoretical analysis and empirical testing,the paper in the last chapter presents policy recommendations: Although the size of the local market in the theoretical analysis and empirical test has been verified,but not all services is significant positive correlation.Therefore,the role of local market size is to develop to a certain extent,the policy makers should pay attention to the home market demand guidance and explore,and strive to cultivate a competitive market environment to promote industrial innovation.In addition,enterprises should take full advantage of the local market size and the effect of competition,enhance the core competitiveness of enterprises,and strengthen local enterprises in the international status.