Correlation Analysis between Agglomeration Effect of Producer Service and Manufacture Labor Productivity in China

Abstract

Agglomeration effect of producer service will affect manufacture labor productivity because of the relationship between the producer service and manufacture. Based on the review of literature, this paper investigates the influence of specialized agglomeration and diversified agglomeration to manufacture labor productivity in China. Through panel data analysis of 31 provinces in China from 2005 to 2011, it is concluded that specialized agglomeration of producer service can promote manufacture labor productivity of eastern and western area, and has a negative effect to manufacture labor productivity of middle area. On the contrary, the diversified agglomeration of producer service has a negative effect on manufacture labor productivity in China’s eastern and western area and a positive effect in middle area. These conclusions make some sense to policy making of manufacturing efficiency promotion from the point of producer service.