An Empirical Analysis Of Servitization Level’s Influence On Export Margins In China’s Equipment Manufacturing Industry

Since being a member of the WTO,China has got a great growth in the export of equipment manufacturing industry,which can be divided into three kinds of export margins:Extensive Margin,Quantity Margin and Price Margin.Extensive Margin means species diversity in export,Quantity Margin emphasizes the export quantity,Price Margin reflects the quality of export products and even the terms of trade,of course it’s better when three margins work together.The existing literatures have explored the influence factors of export margins from many aspects,such as trade cost,exchange rate,but there are few literatures take the degree of servitization as a factor.Servitization is the inexorable trend of equipment manufacturing industry and the effective way to improve the export structure.It is necessary to measure the servitization level of equipment manufacturing industry and export margins of equipment manufacturing industry,the former is measured by complete consumption coefficients of producer services.And the latter is measured with the approach by Hummels and Klenow(2005),based on the export data of 20 major trading nations,to find that the growth of Quantity Margin is the fastest among the three margins,and the other two are slower.In addition,based on the heterogeneity of the product and the heterogeneity of export destination countries,this paper measures the three margins respectively.From the perspective of theoretical analysis,the servitization level of equipment manufacturing industry can influence the export margins from three aspects.From the perspective of the heterogeneity of service input,financial services can promote enterprise productivity in the whole process of financing,management,investment,R&D service can fundamentally improve the technical level so as to obtain higher international market share.From the perspective of product heterogeneity,the servitization level of equipment manufacturing industry can promote the research of new products,the optimization of production process and the improvement of product quality,to promote export margins.From the perspective of the heterogeneity of export destination countries,different characteristics of export destination countries,such as the economic scale,FDI,geographic and cultural distance,will affect the transmission effect.Relying on the effect mechanism,the gravity model is introduced,in which the servitization level of equipment manufacturing industry is the explanatory variable,and three margins of export are explained variables,to build the foundation of the empirical model.There are three main conclusions about empirical analysis.Firstly,the servitization of the equipment manufacturing industry can promote exports by three margins,and Quantity Margin is the fundamental one.Secondly,products with higher technology-intensity are more sensitive to the servitization level.Thirdly,importers with higher income are more sensitive to the servitization level.However,the effect of servitization level to Extensive Margin and Price Margin can’t be fully realized.Finally,this paper put forward some countermeasures,mainly from the government’s point of view,for example,to cooperate precisely with import country,to support enterprises from all aspects,and to improve the servitization level of the equipment manufacturing industry.