A Study On The Influence Of Trade Policy Uncertainty On The Chinese Firm’s Export Market Diversification

A series of changes in the international situation,such as international trade friction,Brexit,and the increasingly strong anti-globalization trend,all reflect that today’s world is in an unprecedented change,which leads to the increasing trade policy uncertainty faced by firm.In the early 1990s,China come up with the strategy of export market diversification,but the export market of Chinese firm is still relatively concentrated.Under the situation of increasing trade policy uncertainty,the export market distribution of Chinese firm is too concentrated to adversely affect the sustained and stable development of China’s foreign trade.Therefore,it is significant to study how the export market diversification of Chinese firm will be affected by trade policy uncertainty.Firstly,this paper systematically reviews and summarizes the research on trade policy uncertainty,firm’s export market diversification and their relationship in the existing literature.Then,we come up with the influence mechanism of trade policy uncertainty on export market diversification.Finally,an econometric model is established to complete the empirical study.The research data comes from China Customs Import and Export Database,China Industrial Firm Database,World Bank Database,WTO Download Facility Database and WITS Database,and the sample range is from 2000 to 2013.This paper measures export market diversification from two dimensions:the quantity and concentration of export market.Then,through the two-way fixed effect model,we empirically analyze the influence of trade policy uncertainty on export market diversification of Chinese firm.The results of my research show us three points:(1)the enhancement of trade policy uncertainty has a significant positive impact on Chinese firm’s export market diversification;(2)This positive impact is heterogeneous,which is more prominent in firm with low financing constraints;(3)When the trade policy uncertainty rises,firm will accelerate innovation,and then promote firm to improve the level of export market diversification.The main contributions of this paper are reflected in the followings:through empirical research,it is found that the enhancement of trade policy uncertainty will improve the level of Chinese firm’s export market diversification,which provides theoretical and data support for how the export market diversification of Chinese firm will be affected by uncertainty.It also points out that firm innovation is the channel through which uncertainty affects export market diversification,which complements the theoretical research on the influence mechanism of uncertainty.In addition,according to the empirical research results,it puts forward corresponding countermeasures and suggestions for the government and firm,which will help our government and firm better cope with the political and economic situation of anti-globalization.