The Impacts Of The Reduction Of Regulation Cost On The Export Trade Under The Heterogeneous Enterprise Theory

Economic globalization is the trend of the world, Global trade liberalization was also showing a trend which cannot be halted. Multinational companies in the world trade gradually hold dominant position. International trade theory research also from inter-industry trade to trade among enterprises. The New-New Trade Theory which originated from the trade between enterprises have shown:the average productivity of export enterprises is higher than that of non-export enterprises. Since the accession to the WTO, the average annual growth rate of China’s trade has reached 30%. From the New-New Trade Theory point of view, such a high trade growth indirectly reflects the rapid increase in the level of productivity of enterprises in China. But theoretical research shows that Chinese export enterprises present a kind of "productivity paradox" the productivity of export enterprises is lower than that of non-export enterprises. And the cost of the export is the deciding factor of whether the enterprise is exported. Based on this situation, this paper establishes a dynamic stochastic general equilibrium model of two countries economic macro model. The purpose of the study is to study the direct impact of export costs on exports and the indirect impact of entry into the domestic market costs on exports.Put the production department divided into the export sector of the economy and the export sector to research the macroeconomic fluctuation problem in the framework of heterogeneous enterprise. Studies have shown that home productivity increasing will promote the home’s exports, and the expansion of exports is happening on the intensive margin, the expansion of exports is not obvious. With the impact of sustained, exports and the non-export departments expanding at the same time. The number of export enterprises and new entrants to domestic enterprises are increased, the number of total number of enterprises in market also increases accordingly. Increasing in productivity improve the output at the same time, supply increases, reducing the market price level. Because of the expansion of output increased the demand for labor, the real wage rise.In the process of trade liberalization which the iceberg costs was gradually reducing directly increase the export, in the resource constraints, crowding out the investment on non-export sector in home. The expansion of the export trade liberalization process more occurred on the intensive margin, the expansion of the export is not obvious. Compare the regulatory costs to enter the market and free market regulatory costs model comparison we found the model with market entry costs, which led to a more sensitive setting in the free market model under the major macro variables impact on productivity of the reaction because of high barriers to entry.Producer prices shock raise export by exchange rate channel and crowding out the investment on non-export sector in home, the number of new enterprises to enter the domestic market is reducing. The domestic initial output will be reduced because of exports crowding out effect on domestic investment. But in the long run it will reach a higher level of steady state. Output and the impact on the number of enterprises is not obvious for the consumer price shock in short-term. The output and the number of enterprises will be in a higher level, and prices will drop to a lower level in long-term.Relaxing the export regulation is to reduce the threshold of access to export markets, the number of export enterprises will increase, however the number of enterprises in the domestic market decline in the constraints of total social investment resource, This shows that the domestic export sector capital flows to non-export sectors, the investment to the non-export decline. The number of export enterprises in the rate of increase is less than the number of new businesses established domestic, the net result of the two effects is the total number of enterprises to decline. Reducing the cost of Export regulation cost damage the non-domestic export sector. Export policies which could increase the exports in home but it also will reduce the total domestic output, the producer prices and consumer prices decline.Reducing the domestic market regulation costs not only makes the new entrants in the domestic market, increase the number of enterprises, but also to increase the number of export enterprises. Reducing the regulatory costs to enter the domestic market, increase the number of new entrants into the domestic market, intensify market competition, accelerate eliminate the corporate with low profits and productivity in the market. The Enterprises which want to survive will strive to improve their productivity levels, will promote the productivity levels progress overall the market enterprise. The regulation cost of exports does not reduce, more non-exporting companies can afford to pay the cost of exports, so the number of export enterprises will increase.Reducing regulatory costs will significantly promote export expansion, expansion, but this trade expansion obtained on the crowding out of domestic non-trade sector. National policies aimed at reducing barriers to market entry can not only promote the development of national non-export sectors, enterprises can survive in the domestic market, the obtain the expected profits, improve productivity, and thus have the ability to cross the threshold to enter the international export market, so it will also promoting the expansion of the export trade sector in long-term. We think support the interests of domestic enterprises will get more. More companies enter the market to offers a variety of product choices, consumers benefit from the diversification of products, thereby increasing social welfare.