The Spatial Effect On China’s Export Trade Of The Sovereign Credit Rating Downgrade

With the development of economic globalization and financial liberalization,Regional economic organizations have been established constantly,international capital’s transnational and cross-market flows appear to be very free.However,while the global financial industry is achieving rapid development and integration,There are also huge hidden dangers to its economic security.When a country’s（region’s） sovereign credit rating is downgraded frequently,it often triggers a large capital flow between this country and others,and then spread to other economies through risk transmission and investment transfer.The large capital flow will have negative impacts on the coutry’s economic security and will be unfavorable to the ecnomy’s healthy.With the strengthening of trade cooperation and capital flow among countries and regions,frequent downgrades of national sovereign credit ratings will worsen the country’s（region’s） economic fundamentals,leading to a decrease in market demand and the appreciation of the RMB relative to the downgrade country’s（region’s） currency will all have an impact on China’s exports.The frequent downgrade of international sovereign credit ratings has increased the risk of debt crisis across the world.Reviewing the European debt crisis and the US rating downgrade,the downgrade may be a trigger to the host country’s（region’s） debt crisis.Due to the investor’s herding effect of negative news on rating downgrades,the risk is also inevitable spread to other countries’ economies through physical and financial market channels,and showing significant spatial spillovers and agglomeration effects.because the traditional econometric method ignores the spatial effect,it will produce a certain deviation when estimation actual problems.So,scholars have become increasingly interested in the spatial characteristics of economic data and Seek different ways to combine spatial effects with traditional econometric models to analyze problems.Therefore,Analysing the spatial spillover and agglomeration effects of China’s export trade with the downgrading of international sovereign credit ratings and the European debt crisis have important theoretical and practical significance.So,this paper incorporates the theory of regional economic space,integrates financial indicators and export trade indicators,introduces binary adjacency matrix、economic spatial weight matrix and collaborative spatial weight matrix,constructs spatial econometric models,empirical test the effect of the downgrade of sovereign credit rating and the European debt crisis’ s spatial spillover and agglomeration of China and various provinces and regions.The main research contents of this thesis include the following three aspects:Firstly,including factors such as sovereign credit ratings,needs,exchange rates,and geographic in space export trade,We establish the economic spatial weights matrix.Analyzing the spatial effects between China and the world’s major export trading partners,and then based on the gravity model of the trade,We use the spatial Dubin model to test the sovereign downgrade’s impact on China’s export trade and its spatial dependence and spillover effects with trading partners.Secondly,from the perspective of the export trade of various provinces in China,the adjacent weights matrix was introduced to analyze the spatial effects of export between 31 provinces further.Based on this,the Dubin model was used to examine the space spillover of the sovereign downgrade among China’s 31 provinces,and then,Comparing and analysing the space spillover effect of the rating downgrade between the countries and provinces.Finally,on the basis of the results of the previous chapter that the spatial spillover effects of the sovereign downgrade on the export trade of Chinese provinces,This paper take the European debt crisis as an example.Using Geo Da to explore the European sovereign debt crisis at specific time points,the impact on the spatial pattern of China’s export trade of the sovereign downgrade.Moreover,based on the analysis of China’s imbalanced export trade,using the Theil index to investigate the differences between the provinces.and then according to "Statistical yearbook of china",We divides China’s provinces into three regions of the East,Central and West,establishing spatial econometrics panel models of SAR and SEM to analyze the export trade spatial aggregation effect among various provinces in China of the Sovereign downgrade.For these conclusions,we put forward some idea of preventing sovereign downgrade and the negative impact of the debt crisis for our economy.