A Study Of The Disparity Effect Of International Trade Growth By The Financial Development Of China

The global financial crisis led by U.S sub-prime, the one hand, has brought great impact on china'economic development, the other hand has also brought serious effects on the growth of our international trade. It reflects that the size of foreign trade has declined, the growth of international export trade has been falling steadily. From this, we know that financial development has great impact on the growth of international trade. More and more scholars put this issue onto the research agenda.There is no shortage of research on the effects of our international trade by financial development. Because of the differences of research methods and perspectives, there are divaricators to the research conclusions of effects of our international trade by the financial development, and most researchers focus on the relationship between international trade and financial development, they usually ignore the impact of disparity effects. This study is built on the basis of previous research, focusing on disparity effects of international trade growth by the financial development.Firstly, we review a large number of domestic and foreign literatures, and analyze and compare those literatures, and make brief comments on those literatures. Secondly we use Theil coefficients to measure and calculate the regional differences of the level of international trade and financial development of East, Middle and West regions in China and regional internal regions. Basis on the measurements and calculations, we find that the largest differences of the level of international trade and financial development exist in the East region, the next one is the West region, and the Middle region is the least one, in addition, the greatest contribution to the overall differences of the level of international trade and financial development is regional external differences and regional internal differences can be ignored. Thirdly, Basis on the theoretical analysis, we find that on the early stages of the financial markets, little positive affects of international trade growth by financial development, and maybe the financial development can inhabit international trade growth; On the stage of gradually improving financial market, financial development continuously promote the growth of international trade with financial market gradually improving; On the stage of financial markets highly developed, financial development will contribute significantly to the growth of international trade. Fourthly, we use the panel data of our country from the year of 1994 to 2007 to test the disparity effect of international trade growth by the financial development of China, and the results show that although the financial development promote the growth of international trade, differences exist in different regions. In the East region, financial development promote the growth of international trade in a greater degree, but the growth effects of international trade by financial development is relatively weak in the Middle region, In the west region, the growth effects of international trade by financial development is not obvious.Based on these results, in the end of this paper, we summarize the conclusions of the full paper. And propose the policy recommendations of the coordination of financial development, thus promoting regional co-ordination of international trade growth.