Abstract: Using the new economic geography model, this paper examines the effect mechanism of spatial distribution and spatial spillover of high-end service industry on industrial upgrading, finding that there is a U-shaped curve relationship among them,that is, when the intensity of spatial spillover between regions remains unchanged, the improvement of agglomeration of high-end service industry can accelerate industrial upgrading; increasing the spatial spillover intensity of high-end service industry can comprehensively improve the industrial upgrading speed of the whole economy.The spatial panel data of 30 provinces in China from 2003 to 2016 are further used to verify the results. The results show that the spatial correlation of industrial upgrading in China′s provinces is significant; the level of agglomeration of China′s high-end service industry is low, which fails to promote industrial upgrading among provinces, even drags down the speed of industrial upgrading, but significantly promotes industrial upgrading at the time level; the spatial spillover of high-end service industry promotes industrial upgrading comprehensively at the spatial and temporal levels; FDI and innovation environment variables drag on the regional level and promote industrial upgrading at the temporal level; and government intervention variables significantly promote industrial upgrading at the regional level and hinder industrial upgrading at the temporal level.

Key words: high-end service industry, industrial upgrading, spatial distribution, spatial spillover, new economic geography