Financial Intermediation Development And The Dual Margin Of Export Growth

With the continuous deepening of market economy, the structure of China’s tradeimproved gradually. However, there are still many problems in the growth of China’sexport trade. On one hand, the export trade faced challenges in sustainable growth; on theother hand, the phenomena that low level of financial development and high trade growthco-exist,"growth paradox" need to be broken down.Resolving these issues is of great significance to the continuous and steady growth ofChina’s foreign trade; and financial development is one of the key factors. Historicalpractice shows that financial factor can constitute an independent source of a country’scomparative advantage; financial development plays an important role in trade patterns andtrade growth. Most scholars who study the relationship between financial development andinternational trade only focus on trade structure to explain the relationship, but they ignorethe effect of financial development to different industries export growth from theperspective of dual margin. This obviously cannot give a reasonable explanation to theabove question. The article gives an empirical analysis between financial intermediarydevelopment and China’s manufacturing exports from the angle of dual margin, using theHS six-digit trade data from1992to2009. The study found that: the dual margin of China’smanufacturing exports mainly concentrated in the intensive margin, the extensive margin isincreasing; from the industry perspective, both the intensive margin and the extensivemargin trended to concentrate on the high-tech industry, the proportion of labor-intensiveindustries decreased gradually; the impact of financial intermediary development on thedual margin of manufacturing export is very significant; further analysis found that theimpact of financial intermediary development on the intensive margin is greater than theextensive margin, and the efficiency is greater than the scale of financial intermediationdevelopment. It has important policy implications in promoting the growth of China’sexport.