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The Reasons Of China’s Export Locked-in

Posted on:2013-01-16Degree:DoctorType:Dissertation
Country:ChinaCandidate:S L XiangFull Text:PDF
GTID:1109330467464104Subject:World economy
Abstract/Summary:PDF Full Text Request
Through FDI and trade, China has gotten rapidly economic growth and improved greatly people’s living level. Behind the expansion of exports and promotion of economic growth, China’s exports growth also has much crisis, such as export mix is too concentrated, labor intensive product exports is declining, processing trade is the main drive of export growth, exports mainly arrived to developed countries, chich cause export growth is vulnerable to fluctuation, especially in the current global economic crisis. Using new-new trade theory, new trade theory, development economics theory and the actual China’s exports, the paper analyzes the reason of China’s export problems by both theoretical and empirical perspective. Compared with previous studies, the paper has optimized and innovated in improved the theoretical model, the applicability of new-new trade theory, intensive margin and extensive margin, biased technical change in comparative advantage, the advantage of labor costs and the processing trade, etc.Based on the existing studies, we firstly develop a model to analyze export growth in developing countries. This model will be accurately explained why the developing countries export more "old" products to others. After tested this model in China’s firms, the papers analyzed intensive margin and extensive margin in China’s export growth. Then, the paper expanded theoretical model of the firms using intermediate products, and analyzed why processing trade always account for a large proportion of China’s exports. We continue to use the biased technological change expand new-new trade theory in two factors model, and this model can illustrate the problem of China’s comparative advantage. By such analysis, the main conclusions include:(1) The developing countries’ export growth always is "old" products because this countries have much more surplus labors in agricultural sector. The surplus labors transfer into manufacturing sector will reduce the costs of using labors, which give invisible protection to lower productivity firms. When potential producers find that there is no profit if they enter the market, the new products developments will slow down, which cause the "old" products exports become the main drive of export growth in developing countries.(2) Based on the analysis of dual margin, we find that the reason of export growth mainly depends on the intensive margin in transition countries related to their agricultural surplus labors. In addition, this paper also finds that the variables of restructuring, economic size, trade costs, RMB appreciation, regional economic integration, external shocks, common language and politics affacted China’s export is defferent. These conclusions suggest that we should export more foreign country.(3) Though general trade and processing trade new-new trade theoretical model, the paper found that the lower production costs are the key to explain why the processing trade firms’productivity is relatively smaller but non-negative profit condition is much higher. Combined with the theoretical conclusion, we found that the productivity is not significant with the China’s processing firm exports. Further, this paper finds that the firm’s export/import behavior had not effect of their employees’ wage increasing, alturough we employed PSM method. So, we will conclude that the labor cost advantage is reason of China’s processing trade explanation.(4) Using panel model and tobit model, we find that biased technical change affecting exports is always existed in labor abundant industry and capital abundant industry. We also find that biased technical change causes differences in relative export of labor abundant industry and capital abundant industry, which also can explain why the relative export of labor abundant industry decreased and the relative export of capital abundant industry increases. (5) By the way, using Solow method, the paper examine whether China’ export firms have self-selection effect. We find that the exporters’ TFP is much higher than the non-exporters, which shows that the China’s exporters maybe have self-selection effect. Further using Heckman method, controlling some variables such as firm size, production capacity, industry, year, region and ownership, Chinese firms still have self-selection in exporting selection and exporting supply.After those analyses, the paper gave some recommendations and future studies.
Keywords/Search Tags:New-new Trade Theory, Heterogeneity, Export Lock-in, Growth Volatility
PDF Full Text Request
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