| The steady growth of China’s export of goods has been one of the most important phenomena in international trade over the past two decades.China has become the world’s largest goods trader and the world’s largest exporter.As the microeconomic main body of goods export,export firms have gradually become the main body of countries participating in international market competition.Therefore,whether China can achieve sustainable growth of goods export is closely related to the success of Chinese export firms.How should Chinese firms cope with competition from developing countries’ counterparts with lower labour costs in international markets?How to compete with developed countries’ counterparts with a large number of famous brands and high-quality products?Is it a matter of increasing productivity to reduce costs,or is it a matter of enhancing product characteristics,including product quality,features and reputation(despite of cost increase due to material selection,R&D and advertising)?Only by identifying the key sources of export firms’ comparative advantages can we give accurate answers to these questions.This paper will try to discuss and analyze these problems.There are two basic frames in the literature of heterogeneous-firm trade theory.One is based on Melitz(2003),using CES(Constant Elasticity of Substitution)utility functions.The other is based on Melitz and Ottaviano(2008),using a quasi-linear quadratic utility function.No matter which of the two mainstream models is chosen to construct the theory,recent papers are carried out by introducing more heterogeneities or relaxing the assumptions of production.Previous studies have extensively analyzed the application of Melitz(2003),but Melitz and Ottaviano(2008)still have plenty of room for exploration.To introduce more heterogeneities,most papers are from the perspective of the cost considerations.Several papers in the recent literature have shown that product heterogeneity also plays an important role in export.Under such a realistic and theoretical background,this paper attempts to build a theoretical framework based on quasi-linear quadratic utility function,introducing product and productivity heterogeneities,analyzing the roles of product heterogeneity and productivity in firms’ export,considering the effects of demand elasticity and cost elasticity,comparing the relative importance of product heterogeneity and productivity heterogeneity in different situations.To examine the theoretical results,this paper uses firms’ production and trade data of 12 Chinese manufacturing industries.The following is the basic structure and main contents of this paper:Chapter 1 is the introduction,which introduces the background,ideas,main contents,methods and innovative points of this paper;Chapter 2 is literature review,which is carried out from three perspectives:first,the mainstream models of heterogeneous-firm trade theory and their extensions;second,the estimation method of product heterogeneity and total factor productivity;third,the influence of product heterogeneity and productivity on firms’ export performance;Chapter 3 is the theoretical model,analyzing the condition of zero-profit of heterogeneous export firms,inspecting the relationships among key variables;Chapter 4 is data and statistical descriptions,including data source,processing process,elementary statistical analysis and sample grouping criteria;Chapter 5 is the estimation of key variables,including demand index which represents product heterogeneity,total factor productivity,demand elasticity and cost elasticity;Chapter 6 tests the impacts of product heterogeneity and productivity on the intensive margin of firm export performance,using annual export value and export market share to measure this margin,processing group estimation according to the categories of trade types,firm registration type and export destinations,testing the robustness of the results;Chapter 7 investigates the influence of product heterogeneity and productivity on the extensive margin of firm export performance,using the number of export products and the number of export destinations to measure this margin,processing group estimation and robustness tests;Chapter 8 is conclusions and suggestions.Through the comprehensive application of various analytical methods including normative analysis,empirical analysis,comparative analysis and the combination of micro level and macro level,the main conclusions of this paper are as follows:First,both product heterogeneity and productivity play important roles in intensive and extensive margins of firm export.The more attractive the product is,the higher the productivity is,the larger the export volume and export market share,and the more kinds of products and destinations the firm exports.Not only is there no "productivity paradox",but also the impact of product heterogeneity cannot be ignored.If we ignore the important role of product heterogeneity,it means we overestimate the role of low cost in the firm export expansion.Therefore,although reducing production costs by increasing productivity can expand firms’ export to a certain extent,the expansion of firms’ export to a greater extent depends on both reducing production costs and enhancing product characteristics.Second,this paper obtain following results by group estimation according to trade types,firm registration types and export destinations.Firstly,to differentiate the general trade and processing trade firms,compared with the processing trade counterparts,product heterogeneity plays a more important role in general trade firms.Secondly,after distinguishing between domestic and overseas-funded firms,compared with..overseas-funded firms,domestic firms have a more obvious effect of expanding export by enhancing product characteristics.The last,after differentiating export destinations,there are three main results:for Chinese firms those export to America,Canada,Japan and South Korea,it is especially important to make their products more attractive and more productive;for Chinese firms those export to EU,enhancing product characteristics is the more effective way to expand export;for Chinese firms those export to the rest regions of Asia,productivity plays a relative important role.Third,the relative importance of product heterogeneity and productivity in the dual margins expansion of firms’ export is related to the elasticity of demand and cost.The smaller demand elasticity of the target market is,which means the greater product difference in the market is,compared with the increase in productivity to reduce costs,enhancing product characteristics is more conducive to the expansion of firm export.The lower cost elasticity of product characteristics is,which means the less marginal cost increase caused by improving product characteristics,compared with productivity improvement,enhancing product characteristics can more effectively expand the intensive and extensive margins of firms’export.Relative to the existing literature,this paper attempts to explore in the following areas:First,this paper attempts to introduce the product heterogeneity and productivity heterogeneity into the framework based on quasi-linear quadratic utility function.Compared with the hypothesis of the framework based on CES utility function,the hypothesis of quasi-linear quadratic utility function is more consistent with reality,and the conclusions are more genneral.Furthermore,the equilibrium price under CES utility framework is the mark-up while the market equilibrium under quasi-linear framework is the price of the Nash equilibrium of interaction of firms.Therefore,there are only a very few papers incorporating multiple firm heterogeneities into heterogeneous-firm framework based on quasi-linear quadratic utility function,this paper attempts to enrich trade theory from this perspective.Second,this paper attempts to inspect the roles of product heterogeneity and productivity in the intensive and extensive margins of firms’ export based on firm data of China’s main export industries.The intensive margin is measured by firm annual export value and export market share,while the extensive margin is measured by the number of firm export kinds of products and export destinations.Furthermore,the relative importance of product heterogeneity and productivity in the dual margins expansion of firms’export is also investigated.In addition,the whole sample is divided into different groups for grouping estimation and comparative analysis according to trade types,firm registration types and export destinations.Third,this paper uses a Chinese industrial firm-level data and customs product-level data,and part of the macro data of the United Nations commodity trade statistics data,matching firm production and export data with destinations’ information.According to information related to the ranking of export quotas,the division of traditional and emerging export industries,this paper choses firm data from 12 China’s export industries as the sample,attempting to enrich the empirical analysis of heterogeneous-firm trade theory. |
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