Journal of Urban Economics and Management

In the literature of urban economics, primate city is a phenomenon that a very large city is formed among small cities in urban system of a region that a major part of population and its economic activities of that region is concentrated in it. According to urban economics theories, GFP is one of the factors that can be influential in forming a primate city phenomenon. Given service sector in the economy of Khuzestan Province and despite this province is industrial one, more than half of employed people are engaged in service sector. In this research, the effectiveness of service sector on forming the phenomenon of primate city in this province has been addressed by separating GDP based on sectors’ VAT. To do this research, time series data during 1991-2011 and Autoregressive Distributed Lag (ARDL) model by using Microfit software were used. The results indicated that service sector has significant impact on primate city of Khuzestan Province both in short-term and long-term. According to the findings, for balanced growth of urban system in the province, it is recommended that to change supportive policies from service sector to other economic sectors of the province, particularly agriculture sector.