Study on Evolution and Interaction of Service Industry Agglomeration and Efficiency of Hebei Province China

Abstract EN

Using data from 2008 to 2017 regarding the service sector in 11 cities of the Hebei Province, this study measures the degree of agglomeration and efficiency of service subsectors, analyzes their spatiotemporal evolution, and discusses the interactive relationship between them using panel vector autoregressive (PVAR) models and GMM dynamic panel model.

The findings are summarized as follows: (1) from 2008 to 2017, service subsectors in Hebei’s cities have a high degree of agglomeration and benefit significantly from specialization; (2) the service in Hebei’s cities is severely inefficient (i.e., efficiency loss is grave).

The empirical results of PVAR models reveal that service sector agglomeration is primarily reliant on its own development momentum and while that can improve technical efficiency and pure technical efficiency, it can also inhibit technical change efficiency.

The variance decomposition results reveal that service sector efficiency is influenced more significantly by itself than by service sector agglomeration.

With the passage of time, the self-influence of efficiency decreases and the influence of service sector agglomeration on efficiency increases.