The Micro-Foundation Study Of Enterprises' Investment Behaviorand Trade Imbalance Under Financing Constraints

Since the 1920s, China's foreign trade surplus and the growth rate increases. The ratio of export trade and GDP gradually improved which is 64.8% in the year 2007. In the year 2009, it falls a little to be above 40%. The current trade imbalance has significant impact on our macroeconomic developments. At present the studis on China often trade imbalance are mainly based on the following two ideas: one is for external causes, namely, China's trade imbalance is caused by external economic environment especially America's economic imbalance; the other one is for internal causes, namely, the China's economic structure is not perfect and local record examination is one-sided perspective.In view of this, in the first place this paper puts enterprises'investment behavior under financing constraints into Schumpeter's growth pattern. In the second place, base on the model above, the profit function is further decomposed; the decomposed results are set and brought into the model studied by Melitz, Grossman, Helpman and Szeidl. Under financing constraints, the impact of long-term investment (technological input) to trade imbalance is observed. The conclusions are made: the existence of financing constraints force the enterprises lower long-term investment (technological input) who are apt to make export trade and make Oem production, that is the reason of export expansion; the decline of financing constraints is good for the enterprises to raise long-term investment which will reduce the trade imbalance. In the third place, this paper simulates the impact of enterprises'investment to trade imbalance under strong financing constraints and weak financing constraints and the results of theoretical model are proved. Finally, by using the VAR model, this paper use month data from the year 2001 to 2008 on savings account,interest rates,imports and exports to prove that: the short term capital on the basis of the domestic effects is not obvious and domestic financing costs has positive relation with inflows; in a long period, the change and trade imbalance is in steady co-integration. Based on this ,this paper provide some political advice through government intervention by building an open platform which breaks the information barrier in order to weaken financing constraint , improve long-term investment of enterprises and achieve trade balance.