Western Products Division Of Research

Alongside the global economic integration, international trade prospering and transaction cost reduce, the worldwide economy is forming one global market. The Intra-product Specialization has been occurred since late 60s of last century, which has deepened the specialization from product layer based on comparative advantage of different countries and different regions to the specific processes or procedures section of intra-product layer, largely changing the operating model of world economy. China has joined the international specialization since the reform and opening policy. Eastern region has fulfilled the industry upgrading and regional economy booming through joining intra-product specialization. Meanwhile, the foreign trade volume of Western region presents continuous growing and the processing trade and cross-border trade increased significantly. However the gap between the west and the eastern has gradually widened. Western region has been at disadvantageous position for long term and at the bottom layer of value chain. This paper focuses on analyzing this realistic issue so as to unveil the root cause between the east and west regions distance and promote industry upgrading from Intra-Specialization angle through qualitative & quantitative studies combining and standard & empirical studies combining appoaches.The main study of this paper is as followed:Firstly, the factors influencing intra-product specialization are analyzed from macro angle (natural environment, economic environment, political&law environment, social customs environment) and micro angle(transaction cost, FDI, enterprises of western region). Secondly, characteristics and effect of intra-product specialization of western region have been summarized. The four characteristics are pointed out as being passive, being limited, being gradient and being unbalanced, the two essential attributes are extracted as being resources-directed and institution-directed. Then the industrial upgrading effects, technology innovation effect, improvement of industrial clusters, the effects on employment have been induced. Thirdly, the case study and empirical study of intra-product specialization of western region. The automobile industry has been selected as case study between Western & Eastern Region. And the influencing factors have been empirically studied from comparative advantages, scale economy and outside environment. The result shows that Per GDP and OPEN variables have negative correlations with intra-product specialization level (dependent variable). However these two variables have positive correlations in the Eastern Region. The reason why OPEN variable has discrepant correlations with intra-product specialization level is because the leading industry difference between East and West. East region is the processing-trade industry oriented, whereas, the West is natural resources industry oriented. The reason why that Per GDP has negative correlations with intra-product specialization is that the scale economy has not been formed in Western Region. Fourthly, policy recommendations have been concluded. The comparative advantages should be integrated, the scale economy should be enlarged, the industry clusters should be forged and the external environment should be optimized so as to promote the intra-product specialization.The conclusion of this paper consists the following parts:Firstly, the macroµ factors influencing intra-product specialization in Western Region have been worked out based on the complete&systematic analysis according to the features of intra-product specialization in Western Region so as to accelerating the industry upgrading. Secondly, empirically study the factors influencing intra-product specialization in Western Region. While the results are found to be discrepant with the hypothesis, the influencing factors in the Eastern Region have been empirically studied since the Eastern Region is the most developed region in China. The root cause of East & West difference lies in the leading industry difference, scale economy and institutional factors in deeper sense. This is consistent with the essential attributes of intra-product specialization in Western Region. Thirdly, the root cause has been analyzed profoundly. The institutional and awareness factors of the new political economic theory have been employed in explaining the western region paradox of joining international specialization. This would raise some enlightening solution for the path dependence in policy aspects by further interpreting the poor industry transparency, high transaction costs and the old institutional legacy problems of resource-oriented western region industries. The deliberate institutional reform and innovation should be enacted in accordance with the natural resources oriented industry and dualistic structure of unban and rural. The property rights should be clarified based on the stake holders'support. The institution of household management, education, personnel cultivation should be reformed. At the same time the mass awareness and proper value system are essential to guarantee the institutions reform.