Hindawi Complexity Volume 2020, Article ID 1750430, 12 pages https://doi.org/10.1155/2020/1750430 Research Article Study on Evolution and Interaction of Service Industry Agglomeration and Efficiency of Hebei Province China Jianguo Liu and Mingyu Zhao Tourism College of Beijing Union University, Beijing 100101, China Correspondence should be addressed to Jianguo Liu; [email protected] Received 10 April 2020; Revised 6 May 2020; Accepted 20 May 2020; Published 30 July 2020 Guest Editor: Jun Yang Copyright © 2020 Jianguo Liu and Mingyu Zhao. *is is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. 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 re- lationship between them using panel vector autoregressive (PVAR) models and GMM dynamic panel model. *e 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). *e 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. *e 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 ag- glomeration on efficiency increases. 1. Introduction from technical change and, therefore, economic growth can be promoted by technical change while factor input remains Over 40 years since its reform and opening-up, China’s unchanged (Solow, 1957) [1]. Subsequently, both Chinese economy has grown rapidly owing to multiple advantages and international scholars have studied TFP [2]. *e re- such as low-cost labor resources and high-intensity capital search content mainly includes the influencing factors of input. Today, China’s economic development has entered a total factor productivity [3–5] and the spatial and temporal new stage: its demographic dividend is disappearing, and evolution characteristics of total factor productivity of re- ecological and environmental problems are increasingly gional economy [6] or industry [7]. In order to alleviate the severe. In this context, the traditional rapid economic contradiction between the development of and ecological growth model, which relies heavily on factor input, is dif- environmental protection, the concept of green develop- ficult to sustain. As pointed out in the report of the 19th ment has become increasingly popular, and scholars have National Congress of the Communist Party of China (CPC), increasingly begun to pay attention to the temporal and China is entering the critical stage of needing to transform its spatial evolution of green total factor productivity and its mode of development, optimize its economic structure, influencing factors [8–10]. In recent years, there have been change its impetus of growth, emphasize quality, efficiency. frequent studies on industry agglomeration and efficiency as and impetus innovation, and improve total factor produc- the effect of industrial agglomeration on economic growth tivity (TFP). Technical Change and the Aggregate Production becomes increasingly significant [11]. Studies also show that Function was the first study of TFP. It showed that, when the there is an inverted “U”-shaped relationship between in- contributions of increases in capital and labor are excluded dustry agglomeration and industry efficiency [12]. On one from total growth, the residual growth is the contribution hand, concentrated geographical distribution of similar 2 Complexity enterprises can promote infrastructure sharing and infor- *erefore, this study discusses the evolutionary pathways of mation exchange, thereby creating additional benefits of agglomeration and the efficiency of Hebei’s service sector as specialization including: facilitating the spread of inferred well as the relationship between them. It is aspired that this knowledge, speedier labor matching, and stimulating en- study’s findings will provide theoretical support for the terprises’ vitality and creativity. *is is the agglomeration development of Hebei’s modern service sector. effect, which serves to improve economic efficiency [13, 14]. On the other hand, the increasing and excessive agglom- 2. Study Area, Methodology, and Data eration of enterprises creates various problems (e.g., land price increases, innovation simulation, and fierce compe- 2.1. Study Area. Hebei is an important component of the tition), which leads to a rise in production costs, reduces Beijing-Tianjin-Hebei city cluster and is an economically motivation to innovate, and has a crowding effect, all of developed and densely populated region of China. Hebei which inhibit economic efficiency [15, 16]. To improve the administers 11 cities (comprising Shijiazhuang, Chengde, industry efficiency, it is therefore important to compare the Zhangjiakou, Qinhuangdao, Tangshan, Langfang, Baoding, agglomeration effect to the crowding effect. *e Williamson Cangzhou, Hengshui, Xingtai, and Handan). As of the end of hypothesis argues the following: (1) at an early stage of 2019, the permanent population of Hebei Province is economic development, the agglomeration effect outweighs 7759.197 million and GDP of 3,596 billion yuan, of which the the crowding effect: in short, industry agglomeration serves tertiary sector contributed 1,504 billion yuan, or 41.8%. *e to improve the industry efficiency; but (2) when the level of Beijing-Tianjin-Hebei Urban Agglomeration is an impor- economic development reaches a certain inflection point, tant growth center in China. However, as a part of the the crowding effect outweighs the agglomeration effect, so Beijing-Tianjin-Hebei Urban Agglomeration, Hebei Prov- that spatial industry agglomeration impedes the industry ince has a large gap with both Beijing and Tianjin in its efficiency [17]. To summarize, most of the existing studies on development. Undoubtedly, the development of Hebei is key industry agglomeration and efficiency select different spatial to determine the development of the Beijing-Tianjin-Hebei scales and different industries to empirically test the Wil- metropolis in the future. From the perspective of the service liamson hypothesis, and their conclusions vary from study to industry’s development, Beijing’s service industry accounts study [18–21]. Industrial agglomeration not only affects for a high proportion of the GDP, almost 80%, whereas economic growth but also impacts pollutant emissions. Hebei’s service industry accounts for a relatively low pro- Some studies have shown that industrial agglomeration can portion. Broadly, the development of the service industry is effectively reduce water pollutant emissions. *is positive an important indicator that helps determine the level of effect is more significant in small cities [22]. urban development in a particular region. Taking Hebei With the pervasiveness of economic globalization and Province as an example, this paper reveals the temporal and increased industrialization, knowledge, information, tech- spatial evolution law and characteristics of service industry nology, and human capital have become increasingly sig- agglomeration and efficiency and discusses the interaction nificant contributors to economic growth, and services are between them, which has certain guiding significance for assuming greater importance at the expense of industry [23]. further promoting the modernization level of Hebei Prov- A developed service sector not only gives an impetus to ince and enhancing the international competitiveness of the regional competitiveness but also is an important indicator Beijing, Tianjin, and Hebei metropolises. of the development potential of a regional economy [24]. *e service sector is mainly characterized by the application of modern technologies, new types of business models, and 2.2. Methodology new ideas, which provide society with high-value-added, sophisticated, knowledge-based producer and consumer 2.2.1. Measuring the Agglomeration Level of Service Industry services. Today, the service sector plays an increasingly by Location Quotient (LQ). *e degree of industry ag- important role in offering employment, improving efficiency glomeration is usually measured by the LQ, Herfindahl index, of the manufacturing sector, and optimizing and upgrading or EG index. Considering the advantages and disadvantages of industrial infrastructure. Most existing studies pertaining to different methods, the purpose of this study and the avail- the service sector concentrate on producer services (an ability of data, the LQ method is used to measure the ag- important component of the sector) [25, 26] and mainly glomeration characteristics of the regional modern service discuss the relationship between the agglomeration of sector. *e LQ is measured by the following equation: producer services and manufacturing [27–29]. *ey examine Lij/Li LQij � ; (1) issues like the measurement of service sector agglomeration Lj/L [30], agglomeration