Research On The Impact Of China's Domestic Market Integration On The Export Technical Sophistication

Since the reform and opening up,especially after China's accession to the WTO,China has actively participated in the international division of labor by virtue of its rich labor force and natural resources,and its foreign trade has grown rapidly,becoming a well deserved“world factory” and a major trader with global influence.However,in the global value chain division system,China is still in the middle and low end position,the foreign trade is “big but not strong”.With the continuous rise of China's labor cost,the aggravation of resource,energy and environmental constraints,the traditional competitive advantage supporting the rapid development of foreign trade has been gradually weakened,and the extensive trade growth pattern that only relies on production factor input to expand exports has been unsustainable.At the same time,the slow pace of global economic recovery,the continuous downturn of international market demand,the growing trade protectionism and the competitive rise of developing countries in the low-end manufacturing industry by virtue of low-cost advantages make “made in China” suffer “double-sided attack” in the international market,and it is more difficult to expand market space.Under the background of many adverse factors at home and abroad,it is of great significance for China to further improve the export technical sophistication and transform its foreign trade from “quantity” growth to “quality”development,so as to break the middle and low end locking in the global value chain,achieve the goal of a strong trade nation and achieve maintain,stable and high-quality economic development.Although the published research has discussed the impacting factors of the export technical sophistication from multiple perspectives,most of the studies lack deep analysis of China's unique “internal factors”.According to the theory of “Home Market Effect”,the economies of scale effect formed by a large amount of domestic demand is an important factor affecting export competitiveness.China has a huge market with a population of 1.4billion,which is an unparalleled advantage for any economy.However,the expansion of domestic demand and the formation of the economies of scale depend on a highly unified domestic market,and the domestic market integration is the prerequisite for China to make full use of the advantages as a big country.In recent years,with the deepening of China's reform and opening up,the level of domestic market integration has been greatly improved.Many studies show that domestic market integration has played a positive role in promoting economic growth,regional development and innovation efficiency.So,does the promotion of China's domestic market integration increase the export technical sophistication? What is the mechanism and way of its function? There are few systematic and rigorous discussions on it.Based on this,this paper attempts to explore the “black box” of the impact of domestic market integration on the export technical sophistication,starting from the unique advantage of China's major economy.Based on the review and summary of relevant research at home and abroad,this paper makes a more accurate measurement of the export technical sophistication and the level of domestic market integration,and systematically explains the impact of domestic market integration on the export technical sophistication,and based on the panel data of 30 provinces in China from 2002 to 2017,this paper constructs the relevant econometric models to empirically test the impact and mechanism of domestic market integration on the export technical sophistication.The main conclusions of this paper are as follows:First,the current situation analysis shows that:(1)From 2002 to 2017,the export technical sophistication of various industries and provinces in China is on the rise year by year.At the industry level,most technology-intensive industries are at a high level of export technical sophistication,but the growth rate needs to be further improved.The export technical sophistication of capital-intensive industries is growing fastest,while most labor-intensive industries have low export technical sophistication and slow growth rate.At the province level,the export technical sophistication of the eastern developed provinces is at a high level,but the growth rate is relatively slow.The export technical sophistication in the western region is the lowest,but its growth is rapid.After the financial crisis,the growth rate of export technical sophistication of most industries and all provinces has declined in varying degrees,among which the computer,communication electronic equipment,instrument and meter manufacturing industry and the eastern provinces such as Beijing,Shanghai and Guangdong have declined the most,which indicates that China's high-tech industry and the eastern region are highly dependent on external market,and the added value of China's export products is relatively low and its ability to resist external risks is poor.(2)From 2002 to 2017,the level of domestic market integration had a fluctuating upward trend.The level and trend of market integration in the eastern,central and western regions and each province are basically the same as that in the whole country.From the regional average value we can see that the level of market integration in the central region is the highest,followed by the eastern region and the western region,which is consistent with the conclusions of the published research.(3)From 2002 to2017,the trend of China's export technical sophistication and domestic market integration is generally consistent,and the two variables have certain internal relations and positive correlation.Second,the theoretical and empirical analysis shows that:(1)China's domestic market integration can significantly promote the export technical sophistication.The impact of market integration on the export technical sophistication has the industry,region and period heterogeneity.The market integration has the most prominent effect in enhancing the export technical sophistication of technology-intensive industries,followed by capital-intensive industries and labor-intensive industries.Market integration in the central and western regions has a significant positive impact on the export technical sophistication,while market integration in the eastern region has no significant effect on the export technical sophistication.After the financial crisis,the role of domestic market integration in promoting the export technical sophistication has been significantly improved,which shows that under the background of the continuous downturn of international market demand and the aggravation of global trade risks and uncertainties,domestic market integration has played a more active and important role in improving the export technical sophistication.(2)Market integration can promote the export technical sophistication through transmission mechanisms such as cost saving effect,demand driven effect,technology innovation effect and institution improvement effect.The most effective mechanism of market integration is to promote technology innovation and enhance the export technical sophistication,followed by the intermediary effect of institution improvement and demand driven,and the intermediary effect of cost saving is the weakest.(3)The impact of market integration on the export technical sophistication has threshold effect and non-linear characteristics.Only when the level of market integration crosses a certain threshold can it play a positive role in the improvement of export technical sophistication,and when the economy development,technology innovation and technological market development reach a certain threshold,the positive effect of market integration on the export technical sophistication can be fully released.(4)Market integration has a significant positive spatial spillover effect on the export technical sophistication,and the spatial spillover effect accounts for 72.36% of the total effect,which has become an important factor driving the export technical sophistication.First,this paper initially constructs the theoretical analysis framework of the impact of domestic market integration on the export technical sophistication,enriches and develops the theoretical research on the impact factors and mechanism of the export technical sophistication.At the same time,this paper empirically tests the impact of domestic market integration on the export technical sophistication from four dimensions of the whole country,industry,region and period,and makes the empirical study on the transmission mechanism ofCompared with the published research,The contributions of this paper are as follows:domestic market integration impacting the export technical sophistication,the non-linear relationship and the spatial correlation effect between the market integration and export technical sophistication,and is more comprehensive in research content.Secondly,this paper has adjusted and improved the index calculation method,which more truly and accurately reflects China's export technical sophistication and the level of market integration.On this basis,this paper comprehensively uses the fixed effect model,intermediary effect model,panel threshold model and a variety of spatial econometric analysis methods to verify and analyze the effect and mechanism of domestic market integration on the export technical sophistication more deeply and concretely,making up for the shortcomings of the previous research methods.