Domestic Market Segmentation Effect On Our Country Enterprise Export Behavior Research

In China, Domestic Market Segmentation has a profound impact on economic development. Exporting is one of factors driving China’s economic growth. This study that analyses the impact on exporting is of great significance.Based on the views of Krugman(1985) and Melitz(2003), this paper, using the data of textile industry in the Yangtze River Delta region which is from Chinese Industrial Enterprises Database, makes an empirical study about segmentation’s influence on exporting.In the theoretical analysis, we have two points. Firstly, within a range of cost, segmentation enables companies to give up the market in other regions of the domestic country, and to select the foreign markets. Secondly, under the circumstance of market segmentation, different efficient enterprises have different exporting behaviors.The empirical result shows three points. Firstly, in Shanghai and Jiangsu Province, market segmentation has a significant impact on exporting. Secondly, in Jiangsu Province, under the circumstance of market segmentation, different efficient enterprises have different exporting behaviors. Thirdly, in Shanghai, Jiangsu and Zhejiang, data shows that, the scale and production efficiency of firms have a positive impact on exporting. The third point is consistent with Krugman (1985) and Melitz (2003)’s theoretical perspectives.Based on the conclusion of this study, we should transform the current market condition from the following three aspects. Firstly, deepen the policy of regional economic development, and promote the market integration. Secondly, promote the transformation of large and high-productivity enterprises. Finally, in the process of boosting domestic demand, phase out backward enterprises under the protection of local government, and promote the transition about SMEs.