Dynamic Flying Geese Theory And Trade Policy Evolution

Flying geese model theory is originally used to describe the development process of lagging countries, from all developing to declining steps. Then the theory is extended to describe the rise and fall transformation of these lagging countries, namely the upgrading process of their industry. Famous scholars like Akamatu, K. Kiyoshi Kojima and Shan Ze Yi Ping have expanded flying geese model theory to study the international transfer of industry which correspondes with comparative advatange structures of countries. Their study is to guide lagging countries to catch up with developed countries.However, the industrial development of lagging countries is a progressive process. Although Kiyoshi Kojima defines flying geese model theory as a theory of Japan’s catch-up-with-and-surpass industrial growth, it is just a static theory. The static state refers to the truth that the relative position of all nations is changeless. To be exact, flying geese model is a theory about catch-up-with-but-not-surpass industrial growth. Based on this understanding, this thesis suggests a dynamic flying geese model which mainly analyses the phenomenon and the reasons of the changed position of all nations in light of the static flying geese model. The essence of the dynamic flying geese model lays in the fact that lagging countries catch up with developed ones in technology, reflecting the technical progress of the lagging countries.In the following sections, the thesis probes into the operation mechanism of the dynamic flying geese model, explaining how the lagging countries catch up with the developed ones. By studying the dynamic model, we find that the catch-up-with of lagging countries is the result of their improved comprehensive parameters, which stand for the value is higher than that of developed countries. In the fourth part of the thesis, the operation mechanism of dynamic flying geese model theory has been discussed from the perspective of Game Theory, including the leap of the system parameter which is the most important one in all comprehensive parametersIn flying geese theory, owing to the draftees relay, the comparative advantage of alternation in different countries comes up step by step, thus the competition between products would expand international trade through direct foreign investment rather than be excessively limited in a narrow field. Therefore, the theory advocates free trade policy; but it also advocates protective trade policy within the evolution process of static flying geese form into dynamic flying geese model and the differences between lagging countries and developed countries are less and less. In the whole evolution process, foreign trade commodity structures are increasingly similar, and overlapping industries are formed, resulting in the competition and alternation between products. Therefore, the trade policy of various countries is evolving in the evolution process of dynamic flying geese theory.