Can FTA Promote Export Diversification-Empirical Analysis Based on Chinese FTA

Abstract

Abstract: Based on the heterogeneous firms model under the monopolistic competitive conditions established by Melitz & Helpman, this paper analyzes the influence mechanism of FTA on Chinese export diversification. Then the paper verifies the impact mechanism by using China's HS-6-digit export product panel data from the 17 countries covered by Chinese trade preferential policy in 2005-2014. The results indicate that the FTA signed by China can promote Chinese export diversification to a certain extent, but there are significant national differences in the promotion effect. Only when the partner country is a developing country will the implementation of FTA promote the export diversification, and a 1% reduction in tariffs in developing countries will lead to an increase of 0.061% in the number of export commodities. In addition, the improve of the Chinese relative TFP, the growth of the agreement countries' GDP, the increase of the relative price level of the agreement countries, the narrowing of differences in the political systems and the reduction in transportation costs will also promote Chinese export diversification. In summary, we should take the "the Belt and Road" as an opportunity to promote the process of signing trade preferences with neighboring countries, further enhance Chinese export diversification and promote the upgrading of Chinese trade structure.

Key words: export diversification, FTA, tariff rate

CLC Number:

F740

YU Zhen, ZHOU Bing-hui. Can FTA Promote Export Diversification-Empirical Analysis Based on Chinese FTA[J]. , 2018(06): 15-25.

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