A Empirical Study On The Influence Of Dialect Diversity To Market Segmentation

Since China's reform and opening up,China's market fragmentation problem becoming more and more serious.Internal reform aims to promote regional economic development,but the fierce competition between local governments urge them to artificially create trade barriers and undermine regional economic exchanges.Local governments regards such practice as a dominant strategy which not only protecting local industry development,but also hindering the economic development of other areas,so it has become the common practice of the local governments to seek for maximized interests.In the short term,protectionism may greatly promote regional economic development,but in long run,it would hinder the formation of the domestic market integration,reduce the efficiency of resource allocation and ultimately impede the local economy.A lot of scholars did deepgoing researches about China's market segmentation.Although there still are objections about the change trend of market integration extent,but it is generally believed that the fragmentation of china's market is the true fact and "vassal economy" is the primary culprit of market fragmentation.While scholars argue on the degree of market segmentation,they also attach great importance to the reason of its changes and trends,although their papers having different pointcut and emphasis,but almost fully confining in the scope of local protectionism,administrative division and so on political system factors.The article analyzes market segmentation problem from the perspective of culture and language interpretation firstly.There is no doubt that the administrative division is the important reason for increasing the degree of domestic market segmentation,but whether could we break the situation of market segmentation if eliminating vassal economy? The paper argues that cultural and linguistic diversity are the deep reason of market fragmentation.Dialect is the explicit representation of culture,becoming a screening mechanism of identification.Dialect diversity increases social transaction costs,shorten the social trust radius and finally hinder the formation of regional integration market.In this paper,we firstly empirical proving the conduction function of trust in the process of dialect affecting the economy,and providing a beneficial supplement for China's regional market integration research.In order to removing the huge noise of administrative factors,the paper constructs a concept of "city circle",namely a new regression unit including the center city and these neighboring cities.Using structured data of dialect diversity and market segmentation,the article's empirical studies show that the dialect diversity is an important factor of China's market segmentation.When the number of city circle's dialect increase one count,the degree of market segmentation increases by 2.7% on average,and the complicated dialect of all dialects district could improve the degree of market segmentation by nearly about 49% at most.Finally,by changing the hierarchy of dialect,considering the special situation of minority areas,using a more robust metrology way to confirmed the robustness of regression.At the same time,this article also used a series of cross multiply items to observe the interactive relationship between dialect influence,administrative factors,economic factors and geographic factors.We found that bigger the city circle's administrative intervention is,bigger the effect that the dialect hindering the market integration is;higher the average city circle's economic development level is and more convenient the transportation is,lower the effect that the dialect hindering the market integration is,but on average,the economic and traffic factors temporarily unable to completely offset the negative impacts of dialect.With the help of CFPS micro data,the article shows that the level of short radius trust is an important transmission mechanism of dialect effecting market integration.Finally,the article also further test the significant negative effect of dialect to improve allocation efficiency of resource.