Research On The Influence Of Market Integration On The Development Of Open Economy

With the spread of the COVID-19 epidemic,the trend of anti-globalization is becoming more and more obvious,and the global industrial chain and supply chain are facing major adjustments and increasing uncertainties.In the face of new challenges posed by changes in the external environment,China has taken the opportunity to make major decisions on adjusting the path of economic development,unimpeding the domestic cycle and reinforcing both domestic and international cycles,thus maintaining steady and sound economic development.Domestic market integration is the basis of domestic circular development.Under the current double-circular development strategy of our country,further strengthening the construction of market integration is an important task in the next stage of economic development of our country.Research on the impact of market integration on open economy also provides policy support for the double-circular development strategy.At present,most of the research focuses on the impact of market integration on domestic economy,and there are few systematic studies on the impact of market integration on the development of China's open economy.Based on this,this paper mainly studies the impact of market integration from the perspective of open economy development,mainly to solve the following problems:one is whether the improvement of market integration level can promote the development of open economy;the other is on what mechanism the improvement of market integration level has an impact on the development of open economy.In the normative research part,based on the analysis of the relevant research on market integration in China,this paper discusses the impact of market integration on the development of open economy from three aspects: market integration and enterprise export,foreign direct investment and the introduction of foreign capital.In detail,the causes of market segmentation in China first,measure,economic effect and governance related literature,from the overall understanding of the progress of market integration in China,and then from the perspective of classical theory and empirical study of two comb the market integration of enterprise exports,foreign direct investment and the introduction of the influence of market integration and openness in direct relationship to the economic development.In the part of fact analysis,this paper firstly analyzes the process of market integration in China,and then studies the characteristic facts of the impact of market integration on open economy.On the whole,a 1% increase in market integration can promote an average growth of 12.8% in the total value of export goods,9.5% in the average growth of enterprises' foreign direct investment,13.4% in the average growth of imported foreign investment measured by the total amount of foreign investment in the registered capital of foreign-invested enterprises,and 14.7% in the average growth of imported foreign investment measured by the amount of foreign investment in the registered capital of foreign-invested enterprises.The impact of market integration on China's open economy is increasing over time in terms of amount,but the relative impact shows a downward trend.From the perspective of provinces,the impact of market integration on exports of most provinces is relatively large,accounting for more than 1% of GDP,and some eastern coastal provinces even accounted for more than 10%of GDP in the highest years.Market integration also has a large impact on the amount of OFDI of each province,which basically exceeds 100 million US dollars.The impact of market integration on the amount of foreign investment introduced by each province is 105-104.815 billion US dollars,and the impact on the export caused by foreign investment accounts for a small proportion of GDP,which only exceeds 1% of GDP in a few provinces,including Beijing,Tianjin,Liaoning,Shanghai,Jiangsu,Zhejiang,Fujian,Shandong,Guangdong,etc.In the empirical research part,this paper first studies the impact of market integration on the export of enterprises and the influence mechanism.This paper constructs a data set containing enterprise financial information and export data,uses the least square method(OLS)to empirically study the impact of market integration on enterprise export scale,export technical complexity and export intensity,and uses the impact of the Great Wall on market integration to conduct a quasi-natural experimental study.The results show that market integration can promote the export scale,export technical complexity and export intensity of enterprises on the whole,which is beneficial to the development of Chinese enterprises' export.However,it only plays a promoting role for local enterprises and enterprises in the eastern and western regions,and has no significant influence on the export of foreign-funded enterprises and enterprises in the central region.Compared with processing trade enterprises,market integration plays a more significant role in promoting the export of general trade enterprises.For enterprises exporting to countries in different regions,the improvement of the level of market integration can mainly promote exports to high-income countries,but has no significant effect on exports to other countries.Through mechanism analysis,it is found that market integration can promote knowledge spillover and exchange to promote enterprise innovation,and can optimize resource allocation and improve the efficiency of resource allocation to promote the improvement of enterprise production efficiency.Through the two mechanisms of technology spillover and resource allocation efficiency,the export behavior of enterprises is affected.About the impact of market integration on enterprises' foreign direct investment.This paper uses the list of overseas invested enterprises and the data of Chinese industrial enterprises to study this problem with the Probit model.The results show that the improvement of the level of market integration is beneficial to increase the probability of OFDI.However,different types of market integration have different influences.The integration of commodity market and capital market can improve the probability of enterprises' foreign investment,while the integration of labor market is not conducive to enterprises' foreign investment.For enterprises with different ownership nature,the promotion effect of market integration level on OFDI of private enterprises is the most significant,followed by state-owned enterprises,and foreignfunded enterprises is the least significant.For enterprises in different regions,the impact of market integration on OFDI of enterprises in western China is less significant than that in other regions.In addition,the study found that the size of the firm is an important factor affecting the function of market integration.Only when the enterprise scale is large,can market integration improve the probability of OFDI of enterprises,and the larger the scale,the greater the promoting effect of market integration.From the perspective of introducing foreign capital,this paper mainly studies the impact of market integration on the investment behavior of foreign direct investment enterprises,which is divided into two aspects: capital increase and capital decrease.This paper constructs a new data set containing the financial data and investment data of foreign-funded enterprises,and uses OLS and quasi-natural experimental methods to study the influence of market integration on the amount and rate of capital increase and reduction of foreign-funded enterprises.The results show that,on the whole,market integration can promote the increase of investment by foreign-invested enterprises and inhibit the reduction of investment by foreign-invested enterprises,but the inhibiting effect on the reduction of investment shows a U-shaped change.From the perspective of regions,market integration has a similar impact on the behavior of increasing and reducing capital of foreign-funded enterprises.The effect of market integration on the eastern region is more significant,but the impact on the central and western regions is not significant.From the perspective of controlling shareholding of foreign-invested enterprises,when foreign enterprises have absolute controlling shareholding in foreigninvested enterprises,the effect of market integration on increasing or decreasing investment of foreign-invested enterprises is more significant,while for foreigninvested enterprises without controlling shareholding,the effect is not significant.From the perspective of different source countries of FDI enterprises,the influence of market integration level on foreign investment behavior from high-income countries is more significant,but the influence on foreign investment behavior from other countries is not significant.From the perspective of the entry mode of foreign-funded enterprises,the level of market integration has a more significant impact on the increase or decrease of investment of foreign-funded enterprises established in the form of sole proprietorship,but has no significant impact on foreign-funded enterprises entered in other forms.Further mechanism research shows that the main mechanism of market integration on the capital increase behavior of foreign-invested enterprises is the production efficiency mechanism,and the main mechanism of market integration on the reduction behavior of foreign-invested enterprises is the cost of sales mechanism.Based on the above research conclusions,this paper puts forward the following policy recommendations: First,in order to achieve high-quality development of an open economy,improve the added value of trade and optimize the structure of trade and investment,it is necessary to effectively promote the construction of market integration,break labor barriers and barriers to factor flow,and build a high-level national unified market.Second,in the process of the construction of the unified market,the construction focus should be different according to different regions.For example,the governments of some municipalities directly under the Central Government in the eastern region have greater autonomy and the development of market integration is hindered,so measures should be taken to break this kind of administrative decentralization,while the central and western regions should strengthen the construction of infrastructure to further promote the construction of market integration.Third,in the process of building the unified market,we should pay attention to the improvement of technology spillover and the efficiency of resource allocation.We have to admit that it is a long and arduous task to unify the market,but in the process of building a unified market,the government should take measures to strengthen the exchange and spillover of knowledge,improve the efficiency of resource allocation,and promote the development of open economy.