Abstract: Based on the coupling coordination degree model (CCDM), this paper firstly measures the coupling coordination degree of the development of the medical service industry and the pharmaceutical manufacturing industry in China’s 31 provinces except for Hong Kong, Macao and Taiwan by constructing an index system of coupling coordination degree. Then on the basis of a contrastive analysis of the impact of the development level of the two industries on the coupling coordination degree, it explores the affecting factors on the coupling coordination degree of the two industries and its spatial spillover effect by employing the spatial Dubin model (SDM) that incorporates the geographic matrix and the nested matrix respectively. The findings show that, since China’s new health care reform, the increase of government health investment has promoted the rapid development of the medical service industry, while the development of the pharmaceutical manufacturing industry has been relatively slow. Thus the coupling coordinated development of the two industries remains at a primary coupling coordination stage. Fixed capital investment and knowledge innovation have a positive effect on the degree of coupling coordinated development between the local pharmaceutical manufacturing industry and the medical service industry, while collaborative aggregation, government support and foreign investment have a negative role in it. The aforementioned factors all have a positive effect on the degree of coupling coordination of the development of the two industries in the neighboring regions.

Key words: medical services, pharmaceutical industry, coupling coordination degree, spillover effect