The Research Of Intra-industry Trade Of China's Automotive Industry

This article began from the summarizing intra-industry trade developments and theories, and then analyzed the intra-industry of China's automobile and parts. We used the Grubel-Lloyd index, GL, combining with China's automobile and parts industry data to calculate the intra-industry trade index of vehicles and parts industry to measure the level of intra-industry trade of China's automobile and parts industry. After that we analyzed our country's vehicles and parts industry's trade types and models.Then we analyzed and comment the theoretical and empirical research, we divided the factors of influence to intra-industry trade into two types of characteristics, country and industry characteristics. The former involved the development of a country's economy, such as income per capita, factor endowment, distance, and gap of the culture and so on. The latter was closely related with the industry level, mainly related to product differentiation, economies of scale, market structure, market transition and so on. This part provided the theoretical basis for the measurement model of the article.And we made the quantitative analysis on the intra-industry trade of China's vehicles industry based on both of the industry characteristics and country characteristics. First, the measurement results showed that economies of scale could improve the intra-industry trade of our country automotive industry and foreign direct investment had a negative impact on the intra-industry trade. Secondly, we did the fixed effect estimation and the measurement results showed that the gap between incomes per capita could improve the intra-industry trade of China's automotive industry, while the gap between factor endowments and the distance between countries (or regions) had a negative impact.Finally the article provided the proposed policy advices on how to improve the overall level of China's automotive industry and promote the intra-industry trade of China's automotive industry.