China's Local Market For The Export Of Service Trade In The "Belt And Road" Countries Field Effect Study

Under the premise of increasing returns to scale and the existence of trade costs,countries with large domestic market demand for certain products will become net exporters of this product,that is,have a local market effect.Since Krugman(1980)proposed the local market effect,scholars from various countries have carried out multi-faceted and multi-angle research and development on the local market effect trade theory,and there have also been empirical tests based on the gravity model and the"extraordinary demand”model..The current global trade pattern has undergone tremendous changes,and the local market effect may become a new source of comparative advantage for a country's trade.In 2013,Secretary Xi Jinping proposed to build a "Belt and Road" economic belt.This initiative has attracted much attention once it was put forward.This concept can not only better develop trade between China and countries along the line,strengthen economic ties between China and countries along the line,but also provide new research models for local market effect theory.Based on this background,this paper builds a gravitational model to test whether there is local service trade in the overall service trade and sub-sector service trade between China and the countries along the route based on the panel data of 65 countries and trades between China and the "Belt and Road" in 2002-2016.Market effect.The conclusions of the study are as follows:First,the service trade between China and the countries along the "Belt and Road" has a significant local market effect as a whole,that is,the expansion of domestic market service demand will effectively promote China's service trade exports to countries along the route.Second,among the 11 service sector,9 departments have been identified as having obvious local market effects,namely transportation,construction,finance,communications,insurance,computer and information,personal culture and entertainment.Government services and tourism show that when the demand for these services in the domestic market increases,the export of services to these countries along the line will also increase.Third,royalty and licensing fees and other business services do not have a local market effect,that is,the expansion of the local market size will not promote its exports.The local market effect can become the trade advantage of China's participation in the service trade of the countries along the "Belt and Road".China should give full play to the role of this trade advantage,insist on expanding the domestic service industry needs,attach importance to the domestic market,and at the same time increase efforts to promote the"one area"."All the way" to promote the continuous development of China's service trade with the "Belt and Road" countries.