Empirical Research On Home Market Effect Of China’s Hi-tech Industry

With the accelerated process of global integration, the development of worldtrade have the new pattern and characteristics, more and more trade happen betweencountries with similar factor endowment。 The new trade phenomena cannot beexplained by traditional endowment theory; Therefore, Krugman as the representativeof scholars put forward the core viewpoint of new economic geographytheory---Home market effect。 China is a export trade country, the economicdevelopment is highly dependent on export trade。Therefore, study on the effect of thehome market is very necessary。On the other hand, at present, our country is in theeconomic reform and transition period。 At the completion of the adjustment ofeconomic structure, to maintain stability growth is the first task。Therefore, to find thestable economic growth point is significant in the economic transition and a periodafter the transition。High and new technology industry’s export trade is organiccombination of the above two points。On base of Krugman’s home market effect theory and its development，wesummarize the domestic and foreign researches in this field；Then, we analyze thetheoretical background of the home market effect and its mechanism。And then thepaper introduce the concept of high-tech industry。We analyze the situation of thewhole China’s high-tech industry as well as import and export。Then this paper usesthe gravity model to study the effect of the home market of our country’s high-techindustry from an empirical perspective。We use the panel data of export trade flow ofbetween China and46major high-tech products export trade in1997-2011。In the twoaspects of the gross and the categories of products, we use the corrected gravity model,and use the software STATA10.0,test and analyze the effect of the home market ofChina’s hi-tech industry。We found：one，In the five industry, the symbol of lnPGDPpcoefficients and CONTCP coefficients of HS88industry is not consistent with theexpected estimate；In addition to this industry, the variable coefficient of otherindustries is consistent with the expected。Two,in China’s high-tech industry as awhole，there is a home market effect; From the specific industry, The home marketeffect does exist in some industries。In the five industry selected in this paper, Thereis the home market effect among specific industry。But in these industries, homemarket effect is strong or weak, this is not the only one; But in the analysis results in this paper, light mechanical and electrical integration products and otherinstrumentation products industry showed no effect of the home market。Finally, basedon the previous theoretical and Empirical Analysis, puts forward the relevant policysuggestions, offer corresponding reference to promote the development of China’shigh-tech industry and foreign trade.