Structure Deviation of Export and Domestic Demand: Causes and Consequences
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| Title | Structure Deviation of Export and Domestic Demand: Causes and Consequences
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| Author | Yi Xianzhong, Bao Qun, Jun Hou and Zhang Yabin |
| Organization | Nanjing Audit University; Nankai University; Oxford University; Hunan University |
| Email | yixianzhong007@163.com；baoqun@yeah.net；jun.hou@qeh.ox.ac.uk；yabinzhang@hnu.edu.cn |
| Key Words | Domestic Demand; Structural Deviation; Institutional Environment; Export Upgrading; Country Size |
| Abstract | From the perspective of international experience, this paper try to explore the general rule behind the Chinese characteristic fact that China's export structure deviated domestic demand and industrial structure. We calculate the structural deviation degree of 51 economies based on the United Nations Industrial Development Organization ISIC 4-digit data. Based on the typical empirical facts, we construct an analysis framework of institutional environment—structural deviation—export upgrading, which explains the mechanism of institutional environment affects export upgrading through structural deviation. Theoretical hypothesis are tested based on the panel data cross counties, the results show that, in addition to factor endowment and intra-product specialization, institutional environment is another important determining dimension of structural deviation. Structural deviation exerts a significant negative effect on export upgrading in large economies, but not in small economies. This means that even if structural deviation is a normal phenomenon under the trade mode based on the comparative advantage and intra-product specialization, it is more important for large countries, comparing with small ones, to reduce the degree of structural deviation by improving institutional environment in order to form the trade model driven by domestic demand. |
| Serial Number | WP1045 |
| Time | 2016-04-05 |
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