Analysis On The Influence Of Trade Openness To Industry Cost Dispersion

In the past 40 years of reform and opening up,China's economy has undergone tremendous changes.With the rapid growth of national economy,people's living standard has been improved.From the experience,open trade plays a unique role.China is adhering to the reform and opening up of the power of the road,and constantly expand the opening up to promote trade liberalization and facilitation.Since the 2008 crisis,however,protectionism has begun to have a negative impact on the global economy,slowing global trade growth.Especially since the first half of 2018,China-US trade tariff issue has become the focus of global attention.In domestic,supply-side structural reform in-depth promotion," Capacity reduction,De-stocking,Deleveraging,Cost reduction,Improving underdeveloped areas "continued to exert force,which reduced costs to become enterprises need to solve the problem.Although a large number of studies have shown that trade openness contributes to economic growth,it also contributes to the growth of corporate performance,productivity and the reduction of corporate costs.However,most of the current studies explain the impact of trade openness at the individual or national level,and are seldom studied at the industry level.This paper tries to re-demonstrate the influence of trade opening from the angle of trade opening and industry cost dispersion.To investigate the effect of trade opening on the cost dispersion of the industry,so as to provide strong evidence for anti-trade protectionism.Based on the heterogeneous enterprise theory,this paper establishes a theoretical model and puts forward theoretical hypothesis.Considering that export enterprises and non-export enterprises have different fixed costs,the equilibrium pricing is formed by maximizing the consumer utility and maximizing the producer's profit.Thus forms the export enterprise and the domestic enterprise different critical cost.After considering the free entry equilibrium condition of zero profit,setting the marginal cost to obey the Pareto distribution can link the opening of trade with the critical cost of the enterprise.Finally,the author argues that the effect of trade openness on the dispersion of industry costs is theoretically discussed,and further theoretical hypothesis:the greater the openness of trade,the less the dispersion of industry cost.Further,the total factor productivity of the enterprise is measured in detail by the Chinese industrial enterprise data.Unlike the traditional LP method,this paper takes into account the method of measuring the LPM method under imperfect competition market for fitting theory model.This method takes actual sales revenue as actual output and takes intermediate inputs as substitution variables to accurately estimate enterprise marginal cost.In the empirical analysis part,this paper established a modified standard error panel model(PCSE),with four-bit spacing to represent the industry's cost dispersion,trade openness with industry dependence degree,to investigate the impact of trade liberalization on the dispersion of industry costs.The empirical results show that expanding trade openness will help reduce the industry cost center trend and help reduce the cost dispersion of the industry.In order to further test the robustness of model estimation and the credibility of empirical results,this paper divides the statistical index of industry cost dispersion into 90-10-bit spacing and standard deviation to replace four-bit spacing.Its conclusions have not changed,and trade liberalization has reduced the dispersion of industry costs.At the same time,considering the difference between processing trade and general trade,this paper divides the sample into non-processing trade and processing trade.Robustness results found that the greater the openness of trade in non-processing trade,the smaller the cost dispersion,and the less significant relationship between them in processing trade.This and processing trade "two out" of the way,raw materials and finished products are in foreign countries,the cost of enterprises concentrated in processing costs and general profit meager.In summary,as China's reform and opening up process continues to accelerate,trade openness to the role of the economy has become increasingly prominent.From the perspective of industry development,trade openness helps to reduce its cost dispersion and increase productivity.Expanding trade openness is bound to accelerate China's economic development and urbanization process and promote the improvement of people's living standards.The government should speed up the construction of trade power,foster the ability of independent innovation,actively participate in international competition,promote trade and investment liberalization,create a good free trade environment,optimize the open layout and explore new trade opening measures.The innovation of this paper is:(1)This paper investigates the influence of trade openness from the perspective of industry cost dispersion,which is very different from most existing literatures.Because the enterprise cost is a biased distribution,the traditional mean-standard deviation can not effectively depict its central index and dispersion index.So this paper uses four-bit spacing to study the dispersion of industry cost.(2)measure the total factor productivity of enterprises.Most enterprise productivity measures take into account the endogenous problem,taking different agent variables as productivity shocks.However,few literatures pay attention to the problem of price deviation caused by imperfect competition market structure.This paper uses the sales revenue as the actual output,combined with the LP method to re-measure the total factor productivity of Chinese industrial enterprises.