Trade Duration And Export Markets Diversification Of China Manufacturing Industry

Since the Chinese government proposed export markets diversification strategy in the 1980 s,this policy has been implemented for more than 30 years.However,on the one hand,the highly concentrated situation of China's export markets has not been effectively reversed,and the import demand form traditional export markets is weak.Not only export scale excessively relied on these areas cannot be sustained,but also constantly triggers trade frictions and disputes,which poses a severe test for the stability of China's export development pattern.At the same time,China's last round of foreign trade expansion mainly targeted at developed economies,and there still retains a huge space for export geographical expansion to other countries and regions.The export markets diversification strategy is necessary for maintaining China's export status and promoting trade power.To promote the diversification process of China's export markets,this study is based on the micro-data of manufacturing industry under the framework of heterogeneous enterprise trade theory,and attempts to explore the realization process and realization mechanism of export market diversification from the perspective of export duration.It also provides a new perspective of thinking about the internal relationship of dual export margins.This dissertation consists of eight chapters.Chapter 1 is introduction,which states research background,research purposes and significance,research ideas and methods,as well as the possible innovations points and deficiencies of the paper.Chapter 2 is the literature review,which focuses on relevant literatures about trade duration,export market diversification,and the linkage mechanism between them.Chapter 3 introduces the implementation status of China's export markets diversification.Based on clarifying the history evolution of China's export market diversification strategy policy,using China Customs Database from 2000 to 2007,we quantify the diversification level of China's export markets and test the applicability of export market hierarchy for China.Furthermore,we describe the dynamic adjustment process of enterprise's diversified export markets and decompose the contribution of export markets diversification to China's export expansion.Chapter 4 adopting the matched sample of 2000-2007 China Industrial Enterprise Database and China Customs Database,uses the fixed effect panel data model and generalized propensity score matching method to study the direct relationship between enterprises export duration and the diversification of export markets,which provides typical facts for further mechanism research.Chapter 5 analyzes the theoretical mechanism between export duration and export markets diversification.Based on the Melitz(2003)model,this chapter constructs a monopolistic competition model which introduces into export fixed(sink)cost for specific export markets.The model shows that the longer the export duration,the lower the zero-profit productivity threshold for entering into a potential export market,which increases the possibility of tapping into new export market and further enhances the diversification level of export markets.Chapter 6 is an empirical test of the theoretical mechanism from the product level.This chapter uses the HS 6-digit coded export manufacturing product data of China exporting to 189 countries(Economies)from 1996 to 2016.Logit model and linear probability model are taken to verify the effect of product export duration on the expansion of potential export markets.Chapter 7 is an empirical test of the theoretical mechanism from the enterprise level.This chapter adopts a micro level data of manufacturing enterprise's exports from 2000 to 2007,composed of 5,782 benchmark export enterprises and 160 countries(economies)benchmark export markets.The Logit model is used to verify the effect of enterprise export duration on the expansion of potential export markets.Chapter 8 is a summary of the dissertation,which summarizes the main research conclusions,and gets the corresponding policy inspiration,aslo refines the feasible direction for the subsequent research.Based on the theoretical analysis and empirical study,the main conclusions of this dissertation include:First,multi-markets export enterprises are the main creators of China's export share.Diversification of export markets can not only contribute to the rapid growth of exports,but also suppress export decline during the period of export recession,and it is effective for both export promotion and export stability.when examining the applicability of the export market hierarchy for China,we find that the higher the popularity of the export markets,the vaguer the hierarchy.Chinese companies may have differentiation characteristics when choosing the initial export market among the United States,Japan,Europe and Asian,but partly follow the export market hierarchy in the subsequent market expansion process based on the initial export destination.In terms of the dynamic adjustment of export markets,the export temptation behavior of enterprises is not only common,but also the failure probability is not low.Second,the relationship between export duration and the number of export markets forms an "inverted U-shaped" relationship.The position of the inflection point indicates that the export duration of China's manufacturing enterprises locates at the left side of the inverted U-shaped curve,thus sustaining the export status of enterprise in the export market is a feasible path for promoting export market diversification of China's manufacturing enterprises.In addition,productivity,export scale,production scale and factor intensity all increase the diversification level of the enterprise's export markets.Third,the derivation of the mathematical model shows that the export duration reduces the market specific fixed export costs,and lower the threshold of zero-profit productivity threshold for enterprises to enter into new export markets,which further affects the diversification level of export markets.It is worth noting that the reduction mechanism of export fixed cost for specific exports market does not affect the export scale of enterprises who have already exported.Fourth,empirical results at the product level show that there is an “inverted U-shaped” relationship between the product export duration and potential market entry,and the promotion effect of export duration decaies over time and after exceeding the threshold value even reflects an inhibition effect.The possible reason behind is that products with longer export durations are mature products,and it is more difficult to develop new markets with old products than with new products.At the same time,there is a strong path dependence phenomenon in the process of China's product export markets expansion.Compared with homogenous products,differentiated products need to pay more information searching costs when entering new markets,and their export market is more difficult to achieve than homogeneous products,while export duration can effectively reduces the market entry fixed costs and promotes export market expansion for such products.Fifth,the empirical results at the enterprise level shows that developed economies such as Europe and the United States,as well as the Asian market adjacent to China,are still the main direction for China's export market expansion.The longer the export duration,the greater the probability for enterprises to enter into a potential export market.The geographical expansion mode is a important path for Chinese enterprises to expand their export markets.In addition,the economic scale of exporting market,their import tariff rate,and China's participation in regional economic integration are also key variables affecting the export market decision of China's manufacturing enterprises.Compared with domestic enterprises,the foreign investment background has a restraining effect on foreign enterprises' export market expansion.However,due to the information advantage,the export duration of foreign enterprises is more effective for exploiting their potential export market.Finally,according to the research conclusions of this paper,the following policy recommendations are proposed:(1)Export market diversification is the basic strategy of export development,it should be long-term and stably implemented;(2)Enhancing the ability of enterprises to resist risks in the export market and sustaining export status can thus create conditions for export experience accumulation,and promote export markets expansion;(3)For the manufacturing export enterprises,the "learning to export" effect should be especially emphasized;(4)The expansion path of export markets should be carefully planned;(4)To alleviate financing constraints on export enterprises,solving the fixed costs for new export markets entry or financing enterprises when they encounter risks in export markets;(6)To cultivate and strengthen the technological innovation capabilities of export enterprises,and to promote the research and development of new products.