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Study On The Relationship Between Institutional Transition And Foreign Trade Development

Posted on:2007-12-30Degree:MasterType:Thesis
Country:ChinaCandidate:H XieFull Text:PDF
GTID:2179360182481901Subject:International Trade
Abstract/Summary:PDF Full Text Request
This paper aims at using the theory of new institutional economy to analyze how the institutional change affects international trade. The theory of institutional transition which core ideology is to inspect the emergence of institution, the change of institution and the evolution of institution, was founded by Douglass. C. .North in 1970s and developed to be a more mature theory system by Ruttan and Lin yifu etc.Institutional transition can promote the development of international trade significantly because institutional change is the endogenous variable of international trade. The foundation and improvement of international trade can decrease transaction cost and reduce the difference between personal income and social income and encourage individual or organization to go in for trade activities, which finally leads to the development of international trade. Chinese foreign trade has received brilliant success, which is the result of the continual improvement of trade system. However, in the meantime, as the biggest developing country, China is confronted with the problem of how to keep constant increase of foreign trade and how to become a powerful trade country .Therefore, this paper studies on the trade development of backward country and make some more practical suggestions on how to innovate Chinese trade system in the future development of international trade.The notional basis of this paper is institution, institutional transition and institutional innovation and the theoretical basis is that institution is the endogenous variable of international trade. Inspecting the history of institutional transition of the world nations, the main type of institutional transition is based mostly on mandatory institutional transition, in which spontaneous institutional transition produces the supplementary effect. The path dependence of institutional transition determines that current institution which will influence the future choice of institution and institutional transition has the function of historic inertia.Institutional change in Latin-American countries impulses the economic development of Latin-American countries greatly and American economic prosperity hooks on well-timed reconstruction of trade system, whose experience and revelation are worth studying and using for reference by developing country particularly China.Looking back upon the history of institutional change in China, we can learn about the reasons and characteristics of trade institutional transition which is mandatory, and incremental, and embody the creature of path dependence. Since the opening-up reform ofChina, its trade institutional transition promotes foreign trade enormously. However, under the background of economic globalization and within the framework of WTO, China must readjust the trade system according to new situation and build up a free trade system with Chinese characteristics if it wants to maintain constant increase of foreign trade and become a powerful country in trade.Studying on institutional change and trade development has strong theorization, and involved large wide, so there must be some limitation need to have more research. Subsequent research is expected.
Keywords/Search Tags:institutional change, path dependence, institutional innovation, foreign trade
PDF Full Text Request
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