Research On The Influence Mechanism Of Intermediate Trade Liberalization On The Firm Profitability

The improvement in the degree of trade liberalization of intermediate products has promoted the development of our intermediate commodity trade,and intermediate products as an important channel of technology spillovers,in better involved in the import business process,can affect the production decision,and operating performance of the enterprise.Moreover,the profitability directly measures the earning power of the enterprise,which is the result of enterprise performance formed after the combination of internal production capacity and external market demand.Therefore,this paper attempts to explore the internal influence mechanism of the trade liberalization of intermediate goods on the profitability of enterprises.First of all,this paper reviews existing literatures at home and abroad from the perspective of intermediate trade and enterprise profitability.Based on the existing theoretical model,a dynamic model of multi-product enterprises is established.By relaxing the assumptions of the elasticity of demand price of enterprises,the paper expounds the impact mechanism how the trade liberalization of intermediate goods influences the total factor productivity and innovation decision-making of enterprises,thus improving the profitability of enterprise.Secondly,after a comprehensive analysis of the current status and causes of China's intermediate trade,the paper based on the data and tariff data of China's manufacturing enterprises from 2001 to 2007 to examine the impact of the trade liberalization of intermediates goods on the profit margin of enterprises.The regression results show that the trade liberalization of intermediates significantly increases the profitability of enterprises,and the production efficiency and new product innovation are the two possible channels for the improvement of the profitability of enterprises:On the one hand,the trade liberalization of intermediate goods improves the production efficiency of enterprises and reduces the marginal production cost of enterprises.On the other hand,the trade liberalization of intermediates promotes the innovation of new products and improves the bargaining power of enterprises.Finally,based on the results of theoretical and empirical analysis,this paper argues that China should deepen and promote the reform of the trade liberalization of intermediates,especially the adjustment and improvement of the import intermediates structure,and improve the system of intellectual property rights protection and the provision of more innovative preferential policies to promote the transformation and upgrading of China's manufacturing enterprises and achieve the improvement of overall competitiveness.