Human Capital And The Comparative Advantage Of Services In Trade

The proportion of services in trade to one country's GDP reflects the country's international competitive capability and internationalization level at a certain extent. Most of countries regard developing services in trade as an important approach to realize modernization.There is no scientific and systemic theory to explain services in trade, because it is a new trade form. But the development of services in trade calls up the theory. Now the study on services in trade done by western economists mostly focus on the comparative advantage. Most of scholars, such as Hill, Deardorf, Tucker, sundberg, put forward that services in trade also has comparative advantage, under some conditions, the traditional comparative advantage theory adapts to services in trade. But because there are many differences between goods and services, traditional trade and services in trade, we can't apply mechanically the traditional theory to services in trade.Most of western scholars deem that in traditional trade, the goods are complete substitute, so the exporters can achieve the comparative advantage by decreasing the cost. But this isn't fit for services in trade. For two reasons, firstly heterogeneity of services is more obvious than that of goods, which means services isn't complete substitute, and the standard of services is changeful. It is very difficult for exporters to produce services on a large scale and decrease the cost. Secondly, services is intangible, and can't be transported and deposited, which means that services in trade is not export services directly but indirectly, it need producer move across the border to supply the services; this is the very importance difference between traditional trade and services in trade. Therefore, we should amend and perfect the traditional comparative advantage theory, when we explain services in trade.Otherwise, western scholars, such as Sapir, Lall, figure out that with the development of productivity and the progress of technology, the comparative advantage of services is not lied on traditional factor, for instance, resource technology difference ,but lied on human capital. Their theory extends the new rangeof research and the new method of the research.Western economists suppose that human capital are coessential, each person is the same as the level of ability and intellect, so each person can complete substitute. But I think this suppose is illogical; everyone's social background, education and character is different. The hypothesis of Western economists ignores the idiosyncrasy of human capital, the relation of human capital and the comparative advantage.In chapter 4, I introduce some new concepts, for example coessential human capital, idiosyncratic human capital. On the basement of these new concepts, I try to prove the pertinence of human capital and the comparative advantage of services in trade by regression, analysis the promotion mechanism of human capital to services in trade, at last I conclude my opinion, which is human capital is decisive factor for the form and conversion of the comparative advantage of services in trade.Firstly, in respect of supply, the important characteristic of idiosyncratic human capital is the increase marginal returns to scale, which means when the input of other factors keep invariability, we increase an unit of idiosyncratic human capital, the returns to scale will increase by degrees. So I put forward idiosyncratic human capital can promote the innovation of technology in services industry, and accelerate the pervasion of new technology in services industry, which is no doubt the benefit for forming the comparative advantage of services in trade.Secondly, in respect of demand, with the enhance of consumer income, the demand of services increases. As the middle input, idiosyncratic human capital can deeper the degree of production, accelerate the quantity of export and import.In order to realize the conversion of the comparative advantage of services in trade, one country needs to increase the quantity of idiosyncratic human capital and improve the quality of idiosyncratic human capital. The accumulate of idiosyncratic human capital is actually the course of applying the science and technology to production. Idiosyncratic human capital is a decisive factor to the form and conversion of the comparative advantage of services in trade. If one country want to converse the comparative advantage of services in trade, they must strengthen the accumulate of idiosyncratic human capital.Since China took part in negotiate in 1994, the opening of services industry and the development of services in trade become very important. Now we research the comparative advantage of services in trade, can adjust our industry construction, enhance our international competitive capability.