Study on the mutual spatial effect between urbanization and service industry agglomeration: Empirical analysis based on Chinese Provincial Panel Data

There is a double multiplier effect between urbanization and service industry agglomeration, and the interaction between urbanization and industrial agglomeration is realized through inter industry linkage. Based on the Chinese Provincial Panel Data from 1985-2013 and the measurement in the Eastern, Central and Western regions urbanization level and service industry agglomeration degree, by constructing a simultaneous equations model, respectively making three stage least squares regression analysis to the mutual spatial effect between the urbanization level and the service industry agglomeration in Eastern, Central and Western regions from 1985-1996 and 1997-2007, 2008-2013. The result shows that the correlation of the mutual spatial effects between different stages of urbanization and service industry agglomeration in Eastern, Central and Western regions of China existed differences. The service industry agglomeration degree of the Central and Western regions compared to the Eastern region more lower, similar characteristics showed in the urbanization development level. In the different stages, resources supply and the potential of the market scale play positive roles in promoting service industry agglomeration, the spatial effect of opening-up to service industry agglomeration is not obvious. Compared to the railway construction, the highway construction brings greater effect to the urbanization level. The level of industrialization is related to the local economic growth and industrial structure adjustment.