Abstract
Previous studies suggested that the development of producer service resulted from manufacturing outsourcing. On the other hand, competitive producer service can promote the progress of manufacturing industry. Theoretically, correlation may exist between them. According to co-integration theory, this paper empirically tests the time series data col-lected from both producer service and manufacturing industry in Shanghai, indicating that co-integration does exist between producer service and local manufacturing industry. Empirical results of this paper partially support the conclusions of prior studies addressed above.
Highlights
Producer service is one of the modern service industries that have been the forces promoting economic development in developed countries
According to co-integration theory, this paper empirically tests the time series data collected from both producer service and manufacturing industry in Shanghai, indicating that co-integration does exist between producer service and local manufacturing industry
Based on data collected from Shanghai, this empirical study with time series analysis shows that co-integration do exist between producer service and local manufacturing industry, partially supporting the hypothesis that producer service interrelates with manufacturing industry
Summary
Producer service is one of the modern service industries that have been the forces promoting economic development in developed countries. A generally accepted view is that advanced manufacturing industry could not exist in China without the presence of advanced producer service. It is much more difficult for manufacturing industry to maintain comparable and competitive advantages. It seems reasonable to suppose that core cities such as Shanghai should promote modern services mainly composed of producer service to serve manufacturing industry better in adjacent provinces and other parts of China. This paper conducts empirical analysis and tries to briefly answer these questions
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