The Formation Mechanism Of Foreign Trade And A Competitive Advantage Based On Institutional Factors

The competitive advantages of foreign trade are the ability advantages of the country which has mass and continuous export to numerous countries with trade profits. According to the concept, two aspects of the competitive advantages of foreign trade can be shown: the one is whether it has the ability to export to numerous countries continuously and in a large amount. Another is whether it can make a large number of trade interests from the export. The competitive advantages of foreign trade in a country are reflected in two levels, the first one is the portion of market sharing, the second is the industrial structure that is the structure of export. Some countries like Japan, Korea and Israel can created the advantages of competition in inferior conditions of resource, while most developing countries can not develop the foreign trade with the advantages of resource, We can say institutions are the key factors.This paper mainly combines the theoretical analysis and real example to discuss the relationship between the institutions and the competitive advantages of foreign trade. It is shown by the theoretical analysis that the institutions make effects on human resources, transaction costs, technology innovation and scale economies. The two accessorial factors are from the government and the difference between interior institutions and exterior institutions. By the means of studying about institution-economies, the theoretical analysis is used to discuss about property right, legal system which affect the source of the advantages of competition. The real example adopts the model of factors supposition to analysis the data of 92 countries' trade in 2003 4.We find that the ones have exerted a largest influence on the competitive advantages of foreign trade is not the economical system such as the monetary policy and trade policy, but the institutions of affecting the transaction costs of enterprises and legal system restrained formally, such as salary system, black-marketing trade and perfection degree of the laws.