A Research On The Boundary Effect Of Chinese Inter-provincial Trade Based On Gravity Model

The development of inter-provincial level trade has important significance to promote the domestic market competition, optimize labor and resource allocation, upgrade the industry level, and thus to promote the integration of the market of our country. By constructing a new way to compute the bilateral trade flow, this paper studied the boundary effect on inter-provincial level goods trade between 29 cities in China (all provinces except Tibet and Hainan) from 2002 to 2012.Through the qualitative analysis on the inter-provincial trade of our country, we found that the inter-provincial trade of China increased to a great extent from 2002 to 2012. From the regional perspective, the eastern region is still the main force of inter-provincial trade, while the middle region is experiencing a vigorous development, struggling to catch up with the eastern region; From the trade flow perspective, the inflow and outflow of inter provincial trade is very asymmetry; from the spatial distribution, there is high concentration inner-provincial trade and neighborhood trade.Moreover, the empirical study show that China’s current effect of Inter-provincial Trade boundary is around 3.5-4.6 times, compared with the previous studies, the border effect has declined, which means that as the economy development of our country and promote the deepening of economic reform, the integration of our country domestic market is heading to success.