Under the background of growth driving force conversion, this paper examines the source of growth in the producer services sector in China with the stochastic frontier analysis (SFA) model, using provincial service sector data during 2005-2016. Research fi ndings show that (1) the total factor productivity (TFP) of producer services in China is characterized by multi-stage changes, with technological progress being the primary driving force and industrial growth being “technology-led”. (2)Innovation, represented by increased TFP, is the leading driving force of producer services’ growth and the overall structure of driving forces is reasonable; (3) the driven structure of niche industries varies greatly, and the conversion of driving forces must take into account industry characteristics; (4) as developed regions are more capable of coping with external impacts and policy stimuli, innovation is the main driving force for them, while for other regions, where innovation as a driving force is weak and old driving forces has led to extensive growth, their structure way evolve to an irrational state. It is necessary to seize opportunities to promote innovation-driven model and take producer services sector as the main battlefield for the cultivation of new driving forces, giving full consideration to the heterogeneity of different industries and regions.
Keywords: producer services, replacing old growth drivers with new ones, stochastic frontier analysis (SFA), total factor productivity (TFP)
China Finance and Economic Review
Volume 8 Number 3 Autumn 2019.P75