The Growth of Service Sectors, Institutional Environment and Quality Development in China's Manufacturing

The path of exploring the high-quality development of the manufacturing industry has become one of the focus issues in China. In terms of experience, the impact of service sector growth on the quality of China's manufacturing industry is unclear. Therefore, institutional environment is incorporated in the research frame, and the Sys-GMM is used to estimate the relationship between them based on China's provincial panel data from 2010 to 2020. The main results showed that: (1) Both the service sector growth and institutional environment can improve the quality of manufacturing development, and they have a significant interaction. (2) The impact of service sector growth on the quality of manufacturing industry decreases in the eastern, central and western regions of China. The expansion of foreign direct investment in services cannot significantly improve the quality development in China's manufacturing, and there is no obvious interaction between SFDI and the institutional environment. However, the domestically funded service sector is the opposite. The main contribution of this paper is to empirically verify the impact of service sector growth on the quality of manufacturing development in China, and consider the differences in the impact of regional development of service sectors and the heterogeneity of investment subjects. In addition, from the perspective of system development, this article considers the influence of the institutional environment, so as to analyze the former's impact on the latter in more detail.