Empirical Research On The "Productivity Paradox" Of Export Enterprises In China

The new-new trade theory is one of the newest trade theories. It has been empirically tested. Almost all the empirical tests support the conclusion of the new-new trade theory. With the deepening of China's reform and opening-up policy, the foreign trade in China becomes more and more frequent. Under this situation, many Chinese researchers use Chinese data to empirically test the new-new trade theory. However, the outcome is much different from other countries. The outcome is on the contrary when use Chinese data. This phenomenon has been called "Productivity Paradox" of Chinese export firms and has aroused interest of many researchers. They have done many research work related to this phenomenon and have come to different conclusions. Some of them support the phenomenon of "Productivity Paradox" of Chinese export firms but the others are against it. So far, research related to the phenomenon has been one of the most hot research directions in the field of international trade.This paper bases on the heterogeneous firms trade theory of new-new trade theory and ties to empirically test "Productivity Paradox" of Chinese export firms by using firm level data.The new-new trade theory uses the difference of productivity to explain the inter trade. The theory predicts that the firm with the lowest productivity will quit the market. The firm with the middle-level productivity will only serve the local market however the firm with the highest productivity will serve the global market. The paper uses the method of Melitz(2003) paper combined with China's situation to test the new-new trade theory. We empirically test "Productivity Paradox" of Chinese export firms by using Chinese data. After empirical tests, we find that "Productivity Paradox" of Chinese export firms does exist.The paper firstly test whether "Productivity Paradox" of Chinese export firms exist and support the phenomenon. Secondly, we use more than 500000 firm-level data of China's industrial enterprise database of 2011 to do statistical tests by dividing the data to different industries ? locations and ownership. Thirdly we set up models and do empirical research. Finally we come to conclusions according to the tests'outcomes.The paper has many innovations. Firstly, we choose the hottest field to do research and use firm-level data to do research, which is different from others. Secondly, we use the 2011 data while most research based on the 2007 data,so the paper is more timeliness. The last but not least, we try to do comprehensible research and continuously introduce different control variable to make the conclusion more convinced.