Abstract: Abstract：Among the driving factors of China′s economic growth, the policy factor is more obvious. In view of the problem of total lag caused by the stage and regional heterogeneity of the growth of service industry in China, this paper theoretically analyzes the internal mechanism of fiscal decentralization affecting the growth of regional service industry, and uses panel data of 30 provinces from 1980 to 2016 to investigate the impact of fiscal decentralization on the growth of service industry.Theoretical analysis shows that the fiscal decentralization system with Chinese characteristics has a direct impact on the local government achievements. Therefore, in terms of industrial development policy support, in different regions and stages of economic development level, it will choose industries that are more conducive to reflecting the economic growth performance appraisal, and affect the differences and stages of service industry growth regions.The results of empirical analysis show that fiscal decentralization has an important impact on the growth of service industry, and presents nonlinear characteristics; further empirical analysis of panel threshold model shows that there are double thresholds for the growth effect of regional economic development on the fiscal decentralization of service industry;in the low-income stage, the strengthening of fiscal decentralization will hinder the growth of service industry, in the middle-income stage, the fiscal decentralization will affect the service industry and in the high-income stage, fiscal decentralization significantly will promote the growth of service industry. This paper explains the lagging development of China′s service industry and the rapid growth of service industry in some regions for a long time. At the same time, it holds that with the economic development level of most regions approaching or exceeding the high-income threshold, we should expand the rapid growth of the financial decentralization service industry. Therefore, we should further improve the financial decentralization system, improve the assessment mechanism of local officials, and improve the quality of economic development.

Key words: fiscal decentralization;local government achievements, services growth, Threshold Panel Regression