Abstract
Using China’s panel data of 30 provinces during 1990–2003, this paper attempts to explore a possible link between financial development and China’s foreign trade. Four indicators are used to identify the role of financial development, which capture both the scale and efficiency feature of China’s regional financial development. The effects of other variables are also investigated, including traditional factor endowments, foreign direct investment, infrastructure and institutional quality, etc. In general, the estimation results suggest that financial development has a quantitatively large and robust effect on China’s manufactured goods trade, among which the financial efficiency indicators play a more significant role in promoting manufactured goods trade than those scale indicators. Sensitivity estimations show that the effect of financial development on China’s total trade essentially differs from that on trade in manufactured goods.
摘要
基于1990–2003年期间中国30个省份的面板数据, 检验了金融发展水平是否构成贸易比较优势的另一来源。 通过选取存贷款规模、 中长期贷款比重以及储蓄—投资转化率等4类金融 发展指标, 在传统要素禀赋、 外商直接投资、 制度性指标等影响因素的基础上, 重点考察金融发展对我国贸易总体规模与贸易结构转变的影响差异。 结果表明, 金融发展对中国工业制成品贸易起到了显著的促进作用; 与金融发展规模指标相比, 金融效率指标能更好地解释我国区域贸易结构的变化特征; 同时金融发展对中国总体贸易发展的影响作用与工业制成品贸易存在 差异。
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Antweiler W, Trefler D (2000). Increasing Returns to Scale and All That: A View from Trade. NBER working paper No. 7941
Barro R, Lee Jong-Wha (2000). International Data on Educational Attainment: Updates and Implications. CID Working Paper, Harvard University No. 42
Bao Qun, Yang Xiaoxiao, Lai Mingyong (2004). An empirical study on China’s saving-investment transformation ratio: 1978–2002. Statistical Research, 9: 12–19
Basu S, Fernald J G (1997). Returns to scale in US production: Estimates and implications. Journal of Political Economy, 105: 249–283
Basu S, Weil D (1996). Appropriate Technology and Growth. NBER Working Papers No. 5865
Beck T (2002). Financial development and international trade: Is there a link. Journal of International Economics, 57: 107–131
Bond E, Trask K, Ping Wang (2003). Factor accumulation and trade: Dynamic comparative advantage with endogenous physical and human capital. International Economic Review, 3: 1,041–1,061
Chen Baizhu, Yi Feng (2000). The determinants of economic growth in China. China Economic Review, 11: 1–15
Chen Jianguo, Yang Tao (2005). A study on the trade promotion effect of financial development in China. Journal of Financial and Trade Economy, 1: 83–86
Deardorff A (1984). The general validity of the law of comparative advantage. Journal of Political Economy, 88: 941–957
Feeney J, Hillman A (2001). Trade Liberalization and Asset Markets. University of Albany Working Paper
Gould D, Ruffin R (1995). Human capital, trade and economic growth. Weltwirts chaftliches Archiv, 131: 425–445
Hao Chen (2006). Development of financial intermediation and economic growth: The Chinese experience. China Economic Review, 4: 347–362
Helpman E (1984). The factor content of foreign trade. Economic Journal, 94: 84–94
Jiang Jin (2004). On the relationship between openness and growth in China: Evidence from provincial time series data. World Economy, 27: 1,571–1,582
Jones R (1965). The structure of simple general equilibrium model. Journal of Political Economy, December, 557–572
Kletzer K, Bardhan P (1987). Credit markets and patterns of international trade. Journal of Development Economics, 27: 57–70
King R G, Levine R (1993). Finance and growth: Schumpeter might be right. Quarterly Journal of Economics, 108: 717–738
Levine R (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35: 688–726
Levine R, Zervos S (1998). Stock markets, banks, and economic growth. American Economic Review, 88: 537–558
Liang Qi, Teng Jian-Zhou (2006). Financial development and economic growth: Evidence from China. China Economic Review, 4: 395–411
Lin S (1999). Export expansion and economic growth: Evidence from Chinese provinces. Pacific Economic Review, 82: 65–77
Lucas R E (1988). On the mechanics of economic development. Journal of Monetary Economics, 22: 3–42
Narayan K, Smith R (2004). Temporal causality and the dynamics of exports, human capital and real income in China. International Journal of Applied Economics, 9: 24–45
Shen Kunrong, Sun Wenjie (2004). Investment efficiency, capital formation and economic fluctuation-an empirical study from the perspective of financial development. Social Science in China, 6: 52–64
Svaleryd H, Vlachos J (2005). Financial markets, the pattern of specialization and comparative advantage: Evidence from OECD countries. European Economic Review, 49(1): 113–144
Temple J (1999). The new growth evidence. Journal of Economic Literature, 37: 112–156
Trefler D (1993). International factor price difference: Leontief was right. Journal of Political Economy, 101: 961–987
Vanek J (1968). The factor proportions theory: The N-factor case. Kyklos, 21: 749–754
Yao Shujie (2006). On economic growth, FDI and exports in China under economic reforms. Applied Economics, 38(3): 339–352
Zhang Jun, Wu Guiying, Zhang Jipeng (2004). Estimation on China’s provincial physical capital stock: 1952–2000. Economic Research, 10: 35–45
Author information
Authors and Affiliations
Corresponding author
About this article
Cite this article
Bao, Q., Yang, J. Does financial development promote International trade?. Front. Econ. China 2, 532–557 (2007). https://doi.org/10.1007/s11459-007-0028-7
Received:
Issue Date:
DOI: https://doi.org/10.1007/s11459-007-0028-7