Value Chain and the Integrated Development of Manufacturing and Modernized Services: A Case Study of Shandong Province, China

The integrated development of manufacturing and modernized service (IDMMS) is an important direction for the transformation and upgrading of manufacturing. Building upon value co-creation, industry chain theory and the industrial boundary literature, this paper explores an analytical framework of IDMMS, combining theoretical and empirical evidence. Then, this study constructs several indicators for measurement of industrial integration. The results indicate that: (1) manufacturing has more self-circulation, and the degree of backward correlation between the modernized services and the manufacturing is weak, while the support and driving effect of the manufacturing is insufficient; (2) most industrial sectors play a relatively stable role in influencing production demand. The findings reveal that there exist several problems referring to industry and enterprises. Finally, this paper discusses the mechanism of IDMMS and reaches its conclusions. The conclusions provide a comprehensive and detailed industrial understanding of the formation of comprehensive and systematic regional economic strategies and suggest targeted industrial policies to achieve sustainable development.