Intermediate Goods Importing, Total Factor Productivity And Dual Margins Of Final Good Exporting

Under the background of opening international economics, by the natural endowment advantage of labor cost and market volume, China experienced a sustaining expansion on the international trade, which significantly stimulated the economic growth as a Catalyst. Through merging into the expanding global production network, China has surpassed Germany and become the biggest goods exporter in the world in2009, and has became second economic power in the world in2012, and the most important thing is that China’s trade volume has leaped to416million and become the largest trading country in2013. With the development of Chinese industrial production and foreign trade, manufactured goods export has accounted for most of China’s export share, and it has grown faster than the total export. The rapid growth of China’s manufacture industry urges China to become the important "World factory". Moreover, behind of the data, there is potential problem of export structure, and quantitative expansion of trade model has been proved to be to the dead end, which blocks the economic growth. It is urgent to find a effective path to upgrade the way of export increasing, which must be connect with the world market, so strengthening the association with external economic environment should be a better way to enhance the trade benefit.Current literatures related to export structure focus on dual margins of China’s export growth, which indicate that extensive margin plays a more important role on promoting export growth, but the input-output relationship based on global production network is ignored when considering the factors influence factors of Chinese manufacture exporting. On the background of merging international market, the trade on international trade, especial the component has became the main method. Through development of international trade and formation of global production network, the international fragmentation of production, the production processes of a product are fragmented into some segments and located in different countries and regions, has become an important factor in China’s manufacturing export. So this paper will make a further study on the correlation and mechanism between intermediate good importing and final goods exporting from the angel of global production fragmentation. On the one hand, this paper develops a heterogeneous firm model which contains N countries, two sectors, one labor endowment and a intermediate input based on the framework of new new trade theory, this model hackles intermediate goods’ promoting effect to final goods export, even on different export growth way of final goods; on other hand, this paper has sorted HS6trade data into seven manufacture industry according the correspondence of Comtrade and GB-2002, and then verify the promoting effect of intermediate goods importing through econometric test, especially emphasizing the mechanism. The main conclusion as follows:1. It is very useful to choose the angle of intermediate goods importing to research the effect mechanism of final goods export, which is fully considering the deepening global production fragmentation. The chapter4builds a theory model and the explanation of positive effect and mechanism intermediate goods of importing is divided into two levels according to the microcosmic subjects-firms:Firstly, the intermediate importing are considered as a endogenous factor, through deriving the effort of firm’s import status (including size, variety and source of intermediate importing), this model reveals intermediate importing can enhance firm’s competition and promote export through compensation channel and technology transfer channel. The outstanding theoretical contribution of this model is that we can calculate the critical value of firm’s productivity, only the firms which have higher productivity and face lower import fixed trade cost will trade fully and earn more profit from external global market, the great mass of firms with lower productivity can enhance their own total factors productivity through importing intermediate goods and fight for more chance to get into global market. Furthmore, the effect of intermediate importing will be further extended, we can the importing is also beneficial to the optimization of the dual margin of final goods exporting, especially for the extensive margin.2. Through the econometric test, we find that the promotion and optimization effect of intermediate importing are very general, TFP undertakes the conduction effect in the mechanism. In the chapter4and5, this paper develops the complex data classification and get the product trade data (HS6) of different manufacture industry according to the correspondence of Comtrade database, BEC and GB-2002. We use these data to verify the promotion effort of intermediate importing to the final goods exporting and dual margin of exporting. The outcomes show that the importing of component really can enhance the final goods exporting and TFP is the main transmission channel for China’s manufacture industry. From the level of different industry, some industries which have more open market, lower trade and non-trade barriers of importing can enhance their own international market competition through importing intermediate input, and urge the exporting of final capital goods. The minority who fail to enhance competition even get negative effect from the larger size of intermediate importing also can obtain the chance to compete and get profit through exporting, because the diversity of intermediate can meet more demand. For the different ways of exporting, the importing of component, especial the extansion of importing source and varieties will be benefit for the extensive margin of export, and also good for upgrading and optimization of China’s manufacture goods exporting.3. We try to find the structure problem exists in China’s manufacture goods exporting through decomposing the dual margin of component importing and final capital goods exporting separately. Chapter6uses AG method to decompose trade data into extensive margin and intensive margin, and the extensive margin is ulterior decomposed into product margin and geography margin. The comparison and analysis reveal that the intensive margin of component importing and final goods exporting (the extension of existing trade on old market) occupies the important position, but the size of extensive margin, especial the product margin is very limited. From the angle of trade extensive margin, the proportion of extensive margin of component importing is higher than the ratio of final capital exporting, which is vivid embodiment of China merging into global market and also the reason of less trade benefit.4. The optimized development path of China’s manufacture industry is taking full advantage of internal resource of global production network. Firstly, reducing trade barriers and carrying out the strategy of free trade zone actively, encouraging trade firms to improve import status; Secondly, promoting effective knowledge absorption capability through building and making perfect long-term mechanism of innovation; Thirdly, making industrial suitable policies is a important goal and aims at adjusting the varieties and source at any time, and than accelerating the positive effect of intermediate goods on the final goods, especially the extensive margin of exporting. For the enterprise, it is important to promote their competitive force through participating in the global production networks and the cultivation and improvement of the global value chain.