<p>The role of services in international trade has attracted growing attention in recent years. Using matched data from Chinese customs, listed firms, and city statistical yearbooks from 2005 to 2015, this study investigates how the development of local producer services affects the export performance of Chinese manufacturing firms. Controlling for a large set of firm and city characteristics, along with various fixed effects, we find that local services development significantly improves export values for firms that are highly dependent on service inputs. This effect is primarily driven by reductions in trade-related costs and gains in firm productivity. Moreover, our results show that the development of local services is especially beneficial for smaller firms and in promoting export product diversification, while having a limited impact on export geographic expansion.</p>