Microeconomic Analysis on the Growth of Trade Volume in China: 1978–2007

Fuxiang Wu and Zhibiao Liu ()
Additional contact information
Zhibiao Liu: School of Business, Nanjing University, Nanjing 210093, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2010, vol. 5, issue 2, 299-324

Abstract: The gravity equation is usually employed by researchers in the field of international trade to explain the growth of a country's imports and exports volume, especially the manufactured goods. But in China, variables in the model, such as exchange rate, tariff, transportation cost, and spatial distance etc., are not sufficient to explain the riddle of China's growth in trade volume. In fact, this growth in China's trade volume is owing to the disintegration of production in the process of economic globalization, to the multinational corporations’ (MNC) vertical outsourcing of their manufacturing processes and procedures, and to the timely readjustment of Chinese enterprises on their strategies of participating in the international intra-product specialization. In this paper we establish an equilibrium model of intra-product specialization dominated by MNCs, and do some empirical tests on the growth in trade volume in China by using the variables including technological conditions of trade, similarity of economies, policy conditions of trade, disintegration of production and level of per capita capital equipment. The empirical results support our basic judgments.

Keywords: riddle of China’s growth in trade volume; microeconomic analysis; intra-product specialization (search for similar items in EconPapers)
JEL-codes: B21 P33 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.1007/s11459-010-0015-2 (application/pdf)

Related works:
Journal Article: Microeconomic analysis on the growth of trade volume in China: 1978–2007 (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:5:y:2010:i:2:p:299-324

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().