Study On The Entrepreneurship Extension And The Dynamic Comparative Adyantages Enhancement

In the process of globalization, China needs to play its comparative advantages much better in order to meet the tough challenges. Based on the specific domestic conditions, China needs to focus on the theory of comparative advantage with the characteristics of dynamic and endogeneity. China is a developing country in transition period, in the context of institutional change, the endowment structure is rapidly changing. Ricardo’s comparative cost theory and Heckscher-Ohlin’s endowment theory with the static characteristics are not significant to China. Copy of the static theory of comparative advantage can easily make China’s economy stagnated in the stage of over-reliance on cheap labor and natural resources, and fall into the "comparative advantage trap" characterized by "low-end locking". To avoid this unfavorable situation occurred and to better participate in the international division of labor, it is in urgent need for China to highly concerned about Adam Smith’s comparative advantage theory with the dynamic and endogenous characteristics. Dynamic comparative advantage theory put forward by Adam Smith deepens the social division of labor as the main way and reveals that the micro-level individuals’ seeking profit motive can promote the improvement of the macro-level social benefits. The deepening of the social division of labor can further promote the effective expansion of the market size. However, in the real world, the comparative advantage turning into the reality of comparative benefits needs to clarify the main body of the relevant transmission mechanism. Undoubtedly, the entrepreneur is the key factor in the transforming process. Thus, this paper attempts to break through the mainstream economics stereotype which is confined to the "economic man" as the market player. However, entrepreneurs can play an important part in China’s endogenous comparative advantage enhancement.Based on the theoretical basis of the existing literature, this paper firstly attempts to put entrepreneur human capital as a special production element into the comprehensive analysis of the production function framework; Secondly, attempts to break through the difficulty of measuring the dynamic comparative advantage, and turn to measure the productivity growth and endogenous technological progress instead;Thirdly, the effective expansion of the market size can play the ties to associate entrepreneurs and dynamic comparative advantage enhancement. The main conclusions of this paper are reflected in the following aspects:(1) Entrepreneur has an irreplaceable principal position in the dynamic comparative advantage enhancement. Through putting entrepreneur human capital into the general equilibrium analysis framework, it can be examined that entrepreneur human capital affects the total factor productivity (TFP) growth and endogenous technological progress. The selection and use of the suitable technology embedded capital can help to promote the transformation and upgrading of the industrial structure, enhance total factor productivity and dynamic comparative advantage.(2) The comparative advantage enhancement can be specific portrayed as the production technology frontier promotion, and the entrepreneurial innovation plays a key role in this process. Entrepreneurial innovation is embodied as optimization and configuration of a package of factors. So its role is higher than the pure technical innovation made by general technicians. Through the comparison and the relevant empirical test of the two types of innovation main body, it can be found that the integration innovation of the entrepreneurs plays an important role in the production frontier promotion.(3)"Endogeneity" and "dynamic" is the main characteristics of the comparative advantage. It can deepen the social division of labor and promote the expansion process of the market size.The reasonable measure of the market size can break through the difficulties in the quantitative analysis of the comparative advantage. Further demonstration suggests that the effective expansion of market size acted as the critical link between the entrepreneur and comparative advantage enhancement. Along with the expansion of market size, entrepreneurs can full play in the broader space with their potential to be fully released, thus it can significantly improve income and wealth levels in the region, the comparative advantage can be transformed into the reality of comparative benefits.(4) With the passage of time,"learning-by-doing" mechanism of entrepreneurs will not reduce or end. Technology diffusion process makes entrepreneurs to get sustainable innovation power. The sustainable technology diffusion can make the "latecomer advantage" becomes possible. Therefore, the implementation of entrepreneurial innovation and technology diffusion creates the "positive feedback mechanism" which promotes the comparative advantage enhancement sustainably.Based on these findings, the paper concludes policy implications. Because entrepreneurship in the real world is often "in hidden",the support from the government can activate the entrepreneurship. Government should give a "support hand", strengthen the "invisible hand" to help enhance the efficiency of the entrepreneurs’"learning-by-doing". Further, improving the system of marketed-oriented reform and resolving institutional barriers can create the endogenous dynamic mechanism, continuous innovation mechanism and investment protection mechanism for entrepreneurs. In summary, by revealing the dominant position of the entrepreneurs in the dynamic comparative advantage evolution in China, and thus expanding the traditional comparative advantage theory both has important theoretical value and practical significance.