A Study On The Effect Of Trade Liberalization On Transformation Of Trade Modes

Since China began to reform and open up,its international trade has developed rapidly.After nearly three decades of development,processing trade began to demonstrate its deficiencies gradually.Trade transformation and upgrading becomes an important task of structural transformation of the economy and improvement of structure of international trade.Meanwhile,since the early 90s of last century Chinese government began to undertake the reformation of trade policy which consisted of the reduction of tariffs and non-tariff barriers.Since joining the World Trade Organization in 2002,Chinese government began to fulfill related commitments and continued to reduce tariffs in order to promote trade liberalization.Does trade liberalization in China have an significant impact on transformation of trade patterns?Furthermore,whether it will lead to the transformation of processing trade into general trade?This dissertation is intended to analyze the influence of trade liberalization on the transformation of trade mode.Base on heterogeneous firm trade theory,this dissertation is planed to analyze the impact of trade liberalization on trade transformation on firm level and industry level.This dissertation analyzed the impact and its mechanism of trade liberalization on the transformation of trade mode from different research sample level.The points different from related literature are as follows:first of all,corporation decision making behavior was considered in this dissertation when studying transformation of trade mode.We analyzed the effect of tariff reduction on choice of trade mode choice at the firm level,the dynamic transformation of trade mode and change of general trade share.Secondly,tariff reductions was distinguished into output tariff reductions and input tariff reduction in order to investigate the impact of both on transformation of trade mode.The influence of quality effect of imported products and competitive effect on transformation of trade mode were been considered.It also discussed hybrid trade export firm and analyzed the influence of tariff reduction on change of general trade share from firm-product level.This dissertation consists of six chapters.The first chapter is the introduction,this part starts with stating research background,purpose and related literature.And it contains research framework and method,as well as innovation point and insufficiency.This parts summarized related literature about heterogeneous firm trade theory,trade liberalization and trade transformation.The second chapter introduced trait and trends of trade liberalization and progress of trade transformation in China.Then the next three chapters are the main parts of this dissertation.The third chapter describes relevant indicators and measurement method of trade liberalization and firm level trade transformation.It analyzes the influence of tariff reduction on organization of export trade by improving firm productivity.Then,empirical analysis are used to test relevant hypothesis and mechanism by using Chinese Industrial Enterprises Database and Customs Database.In the fourth chapter we developed an extended heterogeneous firm trade model with different trade modes to explore the causal link between tariff reduction and dynamic transformation of trade mode.In this part some relevant theoretical hypotheses have been put forward.And plant-level data were used to test hypotheses.The dissertation analysis the impact of trade liberalization reflected as import tariff reduction on dynamic changes of trade mode in pure processing trade exporter and hybrid trade exporter.In the fifth chapter we investigated the influence of trade liberalization on trade transformation by using industry level and product level data.In this part,we distinguished tariff reduction into output tariff reductions and input tariff reductions and examined different effects of tariff reduction on trade transformation.The sixth chapter summarizes this dissertation,which consists of the main conclusions and policy implications.After theoretical and empirical analysis,the major results can be concluded as follows:(1)Input tariffs reduction will increase the probability of export firm choose pure general trade exporting and decrease the probability of pure processing trade and hybrid trade.The higher productivity the firm have,the lower probability of choosing pure processing trade and hybrid trade.Moreover,input tariff reduction which will improve firm total factor productivity affects firm’s choice of trade mode.(2)Input tariffs reduction result in increase of general trade share in pure processing trade exporter,and also making hybrid trade exporters change into pure general trade exporter.In addition,it also results in greater general trade share in hybrid trade exporter.Input tariff reduction promote transformation of trade mode in intensive margin as well as extensive margin obviously.(3)Input tariff reduction has positive significant effect on the amount of pure general trade exporter within industries.When taking into account the effect of input tariff reductions and output tariff reductions at the same time,the former has larger impact on transformation of trade mode.While output tariff reduction has larger effect on transformation in 4-digit industry level,as well as product-level.The estimated coefficients of output tariff reduction is significantly negative,which indicates competition caused by tariff reduction in detailed industries are much more fiercer.Higher quality of imported products is beneficial to increasing trade share of general trade.