A Study On The Impact Of Trade Opening Policy Experiment On Chinese Cities’ Total Factor Productivity

Trade opening policy experiment is an important government’s behavior to integrate China into the international market,which effectively promotes the development of China’s ExportOriented economy.As China’s economy is experiencing the "New Normal",relying on population and resource dividends to expand the scale of foreign trade in an extensive manner is difficult to fundamentally form a driving force of growth.Total factor productivity is an important indicator of measuring potential of economic growth.It is important to clarify the impact and its mechanism of current trade opening policy experiments on cities’ total factor productivity in order to stimulate economic growth.At the same time,the international situation is in a status of "profound changes unseen in a century",the risks and opportunities of opening up are constantly increasing.Under the "Great Changes",China’s opening-up strategy is facing "major adjustments",which means pattern and depth of policy intervention in trade opening policy experiment are constantly adjusting and changing.In particular,trade opening policy experiment under the "the Belt and Road Initiative" shows an obvious trend of diversification and complexity,making its impact on cities’ total factor productivity vaguer.It is urgent to clarify the impact and its possible mechanism of trade opening policy experiment on cities’ total factor productivity under the "new situation".However,the existing research cannot accurately explain and predict the changes of total factor productivity under current trade opening polity experiment,so further explore on this topic is necessary.The existing theoretical system lacks the explanation on the impact of open trade policy experiment on cities’ total factor productivity: The new trade theory and the new economic geography theory have discussed how enterprises with heterogeneous productivity affect the regional productivity level under the opening conditions from the perspective of economy of scale,but both of them have ignored the important fact that trade opening policy experiment can cause exogenous effect and the trade opening does not occur simultaneously in the whole country;The new structural economics has recognized the role of government’s intervention in economic growth,but has not been able to further explore the impact of such special interventions as trade opening policy experiments on cities total factor productivity;Policy experiment theory has explained the characteristics of the trade opening policy experiment in detail,but most of them are completed based on the framework of public management,which may explain economic impacts of trade opening policy experiment arbitrarily.At the same time,results of current empirical research on the impact of trade opening policy experiment on cities’ total factor productivity are also not robust enough for the lack of theoretical basis and adopting inaccurate data.Therefore,this dissertation tries to build a more general theoretical analysis framework to explain the theoretical mechanism of the impact trade opening policy experiment has on Chinese cities total factor productivity,and conduct empirical tests with more robust methods based on more accurate city-level data.This dissertation consists of seven chapters.Chapter one is introduction,mainly introduces current status of related research and backgrounds,ideas,contents,methods and innovations of this research.Chapter two is concept definition and theoretical review,defines the concept of trade opening policy experiment,total factor productivity,China Railway Express and Pilot Free Trade Zone,reviews related theory of new structural economics,policy experiment theory,new trade theory,new economic geography theory under international trade and "new" new economic geography theory.Chapter three analyzes the impact mechanism of trade opening policy experiment on cities’ total factor productivity,and puts forward the train of the theoretical analysis,then constructs a "new" new economic geography model to explain the endogenous productivity change under trade opening policy experiment,analyzes the exogenous impact of trade opening policy experiment on cities’ total factor productivity through the method of literature review.Chapter four analyzes the characteristics of the trade opening policy experiments and typical cases among them,describes spatial-temporal characteristics of total factor productivity of Chinese cities.Chapter five analyzes the impact and its possible mechanism of trade opening policy experiment pushed by local governments independently on cities’ total factor productivity,taking the opening of China Railway Express as an example.Chapter six analyzes the impact and its possible mechanism of trade opening policy experiment pushed by central government on cities’ total factor productivity,taking the experiment of Pilot Free Trade Zone as an example.Chapter seven proposes the conclusions and policy implications according to the results of theoretical and empirical analysis.There are four major conclusions of the dissertation:(1)There are two transmission paths for China’s trade opening policy experiment cause impact on cities total factor productivity.Impacts transmitted through the realization of trade opening goal include endogenous change of cities’ total factor productivity and the exogenous impact through changing regional industrial structure and regional technological innovation level.Impacts transmitted through the policy intervention process include exogenous impact through changing government’s expenditure level,public service level and government’s regulation intensity.Under trade opening policy experiment,cities’ total factor productivity will increase spontaneously and endogenously,but this phenomenon will not necessarily happen for the existence of exogenous impacts.(2)At present,China’s trade opening policy experiments are spreading from east to west,and the local autonomy,regional coordination and quality of policy intervention are all improving.The number of cities operating China Railway Express and experimenting Pilot Free Trade Zone is increasing,and distribution of both kind of cities are balanced.Policy intervention of China Railway Express mainly are subsidies and direct investment,which has a more direct stimulating effect on trade opening;However,the goal of the Pilot Free Trade Zone is to reduce the institutional frictions in China’s participation in international trade through the institutional innovation of trade opening,so that policy intervention is more complex and the short-term stimulus effect on trade opening is weak of this policy experiment.Total factor productivity of Chinese cities shows a downward trend before 2017 and rebounds after 2017;From the perspective of spatial change,total factor productivity of Chinese cities is decreasing from east to west,big cities and cities with higher proportion of manufacturing are likely to have higher total factor productivity;The spatial clustering tendency and convergence tendency of cities’ total factor productivity are increasingly significant.(3)China Railway Express can significantly promote operating cities’ total factor productivity.Among them,the positive influence comes from the endogenous changing power,exogenous power by influencing industrial diversification,intensity of innovation and the reducing government’s expenditure.The negative influence comes from the exogenous power by improving public service level.Operating China Railway Express rarely involves regional coordination,this kind of experiment has a significant negative spillover effect on the total factor productivity of surrounding cities.From the perspective of spatial location,China Railway Express will cause more significant positive overall effect on total factor productivity of central cities,western cities and inland cities;From the perspective of industrial structure,China Railway Express will cause more significant positive effect on total factor productivity of cities with more opened,diversified and advanced industries;From the perspective of city hierarchy,China Railway Express will cause more significant positive effect on total factor productivity of cities with larger population and economic scale;From the perspective of policy environment,China Railway Express will cause more significant positive effect on total factor productivity of cities with lower fiscal expenditure and higher public service level.(4)Pilot free trade zone has a significantly positive effect on experimenting cities’ total factor productivity,which is higher than that of China Railway Express.The endogenous changing power and the exogenous impact through influencing technological innovation are not significant under the experiment of Pilot Free Trade Zone,while indirect positive impact on total factor productivity through increasing industrial diversification is significant;The significant reduction of governments’ expenditure and technological innovation intensity in Pilot Free Trade Zone experimenting cities have indirectly promoted cities’ total factor productivity,while the improvement of economic regulation intensity has an adverse indirect impact on cities’ total factor productivity.The range and intensity of the negative spillover impact Pilot Free Trade Zone has on total factor productivity of surrounding cities are much lower than China Railway Express.Unlike China Railway Express,the pilot free trade zones in eastern cities and cities of higher hierarchy cause more significant positive effect on cities’ total factor productivity,and the positive effect is more sensitive to government regulation and administrative power compared with China Railway Express;Most results of the heterogeneity analysis from the perspective of industrial structure,public service level and fiscal expenditure level are similar with those of China Railway Express.Based on the research,in order to intensify the positive effect of trade opening policy experiment on economic growth and prevent its corresponding risks,policy implications are proposed from the perspective of reducing the risks of low-level duplication,improving the quality of policy interventions,balancing regional development and preventing foreign trade risks.