Transnational Flow of Service Capital Factor and the Mode of Service Sector Growth: A Dynamic Approach
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| Title | Transnational Flow of Service Capital Factor and the Mode of Service Sector Growth: A Dynamic Approach
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| Author | Yang Zhiyuan,Xie Qian and Zheng Shilin |
| Organization | Anhui Finance and Economics University;CASS |
| Email | mavrickbg@hotmail.com； |
| Key Words | Market Liberalization, Service Trade Spillover, Outsource of Service, Endogenous Economic Growth Model |
| Abstract | Driven by external demand, China’s manufactory industry has formed a growth mode featured by high growth-high trade surplus, since the Opening Up. While the Service sector is intrigued by high growth-high trade deficit. This is not only contrary to traditional trade theory, but also far different from the mode in developed countries. Why the correlation of service sector growth and service trade is not depicted by an export-oriented growth mode? Based on Grossman-Helpman Model this paper introduces a service spillover parameter, in order to analysis the dynamic mechanism of transnational flow of service capital factor affecting the mode of service sector growth. We find the effect of market liberalization on the correlation of service export and growth could be negative or positive, depending on the comparison of FDI spillover and extend of internationalization, the mode of service sector growth is modified accordingly. This means the coordination of service industry policy and trade policy is necessary for a sustainable growth. |
| Serial Number | WP673 |
| Time | 2014-08-29 |
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