The Research Of Relationship Betwen Local Government Management And Foreign Trade

From the beginning of 1978, the reform opens the door of institutional change and opening.Since then, economic development and foreign trade of China have a series huge changes. In 1978, China’s total foreign trade volume just has $20.64 billion. But in 2013, China’s total foreign trade volume has reached $4.16 trillion, Which includes exports $2.21 trillion and imports $1.95 trillion. Foreign trade has become one of the “troika” to promote China’s rapid economic growth. China’s foreign trade development speed is so fast. It has been far beyond the theoty of comparative advantage and trade liberalization that can explain. It is also different from traditional trade theory.The rapid growth of China’s foreign trade, thanks to many economic factors and non-economic factors, especially the system reform and innovation. Therefore, the government as a maker and practitioner of institution, the role and function of local government in the trade growth attracts much attention. And the role of the government management in foreign trade development is increasingly highlighted. In this paper, on the basis of existing research results at home and abroad, starting from the institution point of view to study the relations of local government management and foreign trade.This paper builds the basic model and Hansen(1999) threshold effect model by using 216 cities in 1999-2011 panel data of China to analyzes the relationship between local government management and foreign trade. The results show that:(1) When opening as threshold variable, the local government management and foreign trade significantly exist "double threshold effect" and presents a similar "inverted U" curve characteristics, suggesting the optimal management in this region.(2) The degree of local government intervention and foreign trade show inverted u-shaped relationship. Adjust the degree of government intervention is essential to the trade development.(3) The size of local government and foreign trade show u-shaped relationship. The local government to should control the fiscal spending properly. The government is too big or too small which is not conducive to the growth of foreign trade.(4)There is significant positive correlation with local government efficiency and foreign trade. Government efficiency is higher, the higher the performance of foreign trade, and vice versa. Thus, we should clearly recognize the role of local government management in the development of foreign trade, through reasonable and efficient government management to promote the sustainable development of foreign trade.