R&D, Economies Of Scale And The Transformation Of Chinese Export-oriented Economic Development Pattern

This paper establishes an endogenous comparative advantage analysis framework to discuss the transformation of Chinese export-oriented economic development pattern. The analysis framework explores that the R&D activities of differentiated high-tech products can play economies of scale to improve the international competitiveness of products; and that the R&D activities can encourage and accelerate the accumulation of human capital to improve endowment structure of developing countries, making the transformation of export-oriented economic development pattern in the process of economic development. Export-oriented economic development pattern refers to the status of a country in the world division of labor and the resulting trade patterns. The transformation of export-oriented economic development pattern means construction of incentive institution encouraging enterprise to engage in R&D activities. By strengthening R&D activities, human capital is accumulated to improve endowment structure. And self-reliant innovation capability would be cultured to upgrade comparative advantages and optimize industrial structure in the process of R&D activities.Theoretical model constructed in this paper put the R&D and production activities of differentiated product as a whole, so that the R&D activities can have economies of scale. The principle is that R&D activities require a higher initial cost, and production of R&D results will only need a constant marginal cost once successfully developed. Therefore, the average cost of product is no longer a constant, but rather a decreasing function with the increase in production. This reflects the economies of scale. From the demand perspective, if the size of the population in a developing country is greater than that of a developed country, so the domestic markets of the developing country is larger for differentiated high-tech products. If there are trade costs, home market effect makes enterprises of developing country play economies of scale to a greater extent to improve the international competitiveness of products.Theoretical model derivation of this paper shows that human capital is an endogenous variable of economy. Strengthening R&D activities will increase the demand for human capital and raise the wage rates of human capital. Although the optimal duration of individual education has nothing to do with wage rates of human capita, improving human capital wage rates will definitely increase the discounted value of skilled labor's lifetime income. And this will increase the fraction of the population that chooses to acquire skills, thus speeding up the accumulation of human capital and improving the endowment structure of developing countries, and ultimately upgrading the comparative advantage and industrial structure of developing countries.To transform export-oriented economic development pattern of developing countries, the most important is learning by doing in R&D activities, and gradually cultivating self-reliant innovation capability, since human capital is only the basic condition to cultivate self-reliant innovation capability. Due to the prevalence of trade costs, home market effect will allow local enterprises priority to sizeable domestic market, and get stable business returns from R&D results. On the support of steady profits stream, enterprises will engage in R&D activities continually, and gradually cultivate self-reliant innovation capability.Based on the theoretical analysis, a dynamic panel data model is constructed to analyze the impact of R&D activities, economies of scale and human capital on the dynamics of comparative advantage. The estimation results of difference GMM verify the theoretical deduction. Since cultivating self-reliant innovation capability is most important in the process of transformation of export-oriented economic development pattern of developing countries. Based on the theoretical analysis of cultivating self-reliant innovation capability, this paper makes an empirical analysis. The results show that when the imported capital goods enter the R&D department, they will complement the domestic R&D activities, and the efficiency of R&D activities can be improved. What is more important is that through R&D activities, the researchers can learn by doing, and unceasingly accumulate human capital and gradually cultivate self-reliant innovation capabilities.