The service industry is characterized by its institution-intensive feature.This research empirically tests impact of China's institutional environment during the period of market reform,mainly described by the government-led distribution structure of economic resources,the development of non-state economies,the quality of intellectual property protection,the process of urbanization and the intensity of market competition in main service sub-industries,on the development of service sectors in 28 provinces and main sub-industries classified by 2 different Industry Classification Standards during 1990-2010.Empirical results show that,the growth of domestic service industries is significantly promoted by the development of non-state economies,urbanization process,high-quality intellectual property protection and sufficient market competition,meanwhile,which is obstructed by current resource allocation structure dominated by the government,poor environment of intellectual property protection and market competition. <<