Abstract: Compared with the industrial development level in China at present, the development level of the producer services in China cannot meet the need of economic development. From the perspective of transaction costs, this paper constructs a theoretical model which includes the Internet, the transaction costs and the producer services. Then it makes use of the provincial panel date from 2008 to 2014 to conduct an empirical test on the relationship between the Internet, the transaction cost and the producer services. The results show that the Internet has a significant positive effect on the development of the producer services, and that the increasing development of the Internet will promote the continuous expansion of the producer services. The promotion effect of the Internet on the development of the producer services turns out to be an intermediary effect of transaction costs, through reducing the transaction costs the Internet can promote the development of the producer services. In order to give the Internet a full play in promoting the development of the producer services, it is necessary to further strengthen the investment and construction of the network infrastructure, further improve the Internet availability rate, and further speed up the industry transformation and upgrading..

Key words: Internet; producer services; transaction costs; mediating effects