The Research On The Impact Of International Trade On The Factor Distortion Among Cities In China

International trade is an important part of China’s economic development,and its economic effects have a profound impact on the rational allocation of capital and labor factors among cities in China.Since the reform and opening up policy,the severity of factor price distortion in my Country has attracted the attention of a large number of scholars.The development of international trade has played a role in improving factor price distortion and has improved the efficiency of resource allocation among cities.The continuous improvement of foreign trade openness has played a positive role in alleviating the distortion of factor prices.As a part of China’s economic development that cannot be ignored,factor prices have certain significance in both theoretical and practical aspects to the study of the mechanism of international trade affecting factor price distortions.The improvement of factor price distortion in international trade mainly comes through three channels.Firstly,the improvement of the degree of opening to the outside world promotes healthy competition in the market,and promotes the free flow of factors among various sectors,thereby reducing the degree of factor price distortion;Secondly,the more optimal allocation between domestic departments can alleviate the distortion of factor prices;Thirdly,the improvement of the degree of opening to the outside world promotes the optimization of the foreign trade structure,promotes the cross-border flow of production factors,and finally realizes the improvement of factor price distortions.This paper takes statistics among 270 cities from 2005 to 2017 as the research object,measures the price distortion of capital factors and labor factor price distortion,and uses the comparative analysis method to compare the factor price distortion.The measurement results show that the total factor price distortion was negatively distorted from 2005 to 2009,and the degree of distortion continued to decrease.By2010,the total factor price distortion reached a minimum value,and then turned into a positive distortion,and the degree of distortion continued to expand within the study.Then,this paper completes the empirical test on the basis of the existing theory.This paper measures international trade by the degree of foreign trade openness,and uses a time-individual double fixed effect model to analyze the net effect of international trade on factor price distortions.The results show that the improvement of the degree of opening to the outside world can promote the improvement of total factor price distortion.Further heterogeneity analysis shows that,whether from the perspective of urban area or city scale,the increase in openness to the outside world has a positive effect on the improvement of factor price distortions.At the same time,after changing the core explanatory variable measurement indicators and adjusting the sample size,the results are consistent with the benchmark regression results,and the results are robust.In this regard,at the end of the article,some suggestions are put forward,such as improving the openness of foreign trade and optimizing the structure of foreign trade.