The Reacrch About The Productivity Effect Of Chinese Service Industrial Deepening Division Of Labor

The development of service industry in addition to refer to expand production and the scale, also includes the ascension of the production efficiency. The role of the division of labor in economic growth has always been one of the core problem in economics. Early in the period of classical economics, Adam Smith put forward the theory of international division of labor, and as an important weapon in his opposition to mercantilism "theory of the balance of trade" and protective trade policy. In the process of economic globalization, our country promoted the rapid development of the service industry through the international industry transfer and offshore outsourcing. The service industry of our country had achieved rapid growth both in the total quantity and quality. It must be admitted that, due to Chinese overall economic especially the service industry developed lately, with other economies, especially compared with the developed countries, Chinese service industry has "three low" phenomenon, that is, the proportion of the added value in the service industry is low, the employment proportion is low, and the added value per capita is also low.This paper firstly review the theoretical literature about the division of labor and the productivity. We confirm that China has the phenomenon that the services division continues to deepen through the input-output table data. We also construct a theoretical model to analysis the productivity effect of services division about the service industry. Based on the theoretical analysis, we put the total factor productivity in China’s service industry as the research object, and we calculate the total factor productivity of China 2002-2012 services in different industries and regions by nonparametric Malmquist productivity index method. Based on the production function of the service industry and the input-output tables, We build a model by the panel data of our country 2002-2012 a total of 11 years in service industry, considering the related control variable. We systematic study the effect of productivity and the differences of industry and region in the deepening of labor division. The research shows that:the deepening of labor division promotes the total factor productivity of service industry, and productivity effect of the service outsourcing is greater than of the material outsourcing. The productivity effect of the material outsourcing and the service outsourcing in knowledge intensive service industry is less than the non-knowledge intensive service industry. The productivity effect of developing region’s material input should be less than the developed region. The productivity effect of developing region’s service outsourcing is greater than the developed region.Finally, according to empirical results, this paper puts forward some policy suggestions. Since the deepening of labor division can promote the total factor productivity of service industry, then the government should encourage the implementation of service enterprises in the onshore and offshore outsourcing, deepen the services specialization. At the same time, basing on that productivity effect of the service outsourcing is greater than of the material outsourcing, we should encourage enterprises to turn from a focus on material outsourcing to service outsourcing. We should support the division of non-knowledge intensive business services, as the productivity effect of knowledge intensive service industry is greater than of non-knowledge intensive service industry. Of course, the government should also improve the market environment and reduce market transaction costs. Only by truly enhancing production efficiency of service industry, we can improve the competitiveness of China’s service industry and the whole national economic competitiveness, and promote the progress of the whole country and nation.