Study On The Sustainability Of China’s Dynamic Comparative Advantage Enhancement

With the deepening of economic globalization, market competition is increasingly fierce. It’s more difficult for China to rely on the traditional comparative advantages such as cheap resources, labor, and it’s likely to be locked in the low end. To seek for the further development of China’s economy, it’s urgent to research how to make the comparative advantage have a dynamic, endogenetic and sustainable improvement. Hence it’s required to pay high attention to the scarce elements of entrepreneur resources. Past researches mostly agree that entrepreneur is the power source of economic growth, but they are insufficient to reveal and demonstrate the interaction mechanism between entrepreneur resources development and comparative advantage enhancement. This study reveals the special importance of entrepreneur resources in the context of transition economy, analyzes the interaction mechanism and realization approach between entrepreneur resources development and comparative advantage enhancement, and then makes empirical tests for them. The main reasoning methods and research conclusions of this paper are shown as below:(1) With the development of entrepreneur resources, comparative advantage enhancement has three main features:dynamics, endogencity and sustainability. The first feature of comparative advantage is dynamics. Entrepreneurs would discover and make use of the market information, which can optimize the environment of market information, and lead to more business opportunities and enlargement of market size. Based on it, the comparative advantage could switch smoothly from the time-point of "static state" to the period of "dynamic state".The second feature of comparative advantage is endogencity. By dissecting the mechanism of endogenous comparative advantage enhancement, it reveals that the development of entrepreneur resources can lead to the enlargement of market scale and deepening of work division, which is the key to the more efficient conversion of comparative advantage into the real comparative benefit. The third feature of comparative advantage is the sustainability. It discusses the sustainability of comparative advantage from the angle of entrepreneur affecting the economy efficiency. After analyzing the three connotations of economic efficiency in macro, micro and integrate levels, some econometric analysis finds that, the entrepreneur resources development featured in their own ability and motivation improvement would remarkably promote the economic efficiency with three dimensions:production efficiency, dynamic efficiency and allocation efficiency.(2) The activation of entrepreneur human capital with recessiveness feature is high correlated to the social economy system. The study, for the first time, selects estimation index from the dimensions of quantity and performance to measure the entrepreneur resources abundance in its different development stage, and introduces the indexes into the framework of production function. The qualitative research using he Chinese provincial panel data in recent years shows that entrepreneur resources development promote the elements structure upgrading, improve the productivity significantly, and accelerate the endogenous enhancement of comparative advantage. In this process, entrepreneurs could play a key role in the "enhancement". The expansion of market extent is key link of entrepreneur resources development and comparative advantage enhancement. By developing the industrial agglomeration, capital market and foreign direct investment is good for the expansion from product market to element market, from domestic market to international market. This is an important way of enhancing entrepreneur’s ability and endogenous comparative advantage. This research takes Zhejiang Shaoxing textile industry cluster and Yiwu industry cluster as a typical case for analysis to provide referential ideas for China’s transformation and upgrading of the traditional industry. In addition, the analysis of e-commerce development, which is the most dynamic economic area in China, verify further the benign interaction like a rising spiral between the entrepreneur resources development and comparative advantage enhancement.(3) The three kinds of interactive coordination between entrepreneur innovation and technology innovation, entrepreneur innovation and entrepreneurship, production efficiency and dynamic efficiency, are the important driving force for the sustainable enhancement of comparative advantage. Firstly, since entrepreneurs can improve the fit between technology innovation and market demand, and effectively grasp the equilibrium point between advanced technology and appropriate cost based on their innovation of combining all production factors, entrepreneur innovation can lead to interactive coordination between the two kinds of innovations by harnessing and promoting technology innovation, hence make economic efficiency improved. Secondly, though technology innovation can promote the economic growth, it would also lead to production surplus, causing involuntary unemployment, etc, and bring about contradiction between micro production efficiency and macro dynamic efficiency. Development of entrepreneur resources can lead to an increase of business establishment, which is an effective way of resolving the contradiction. Therefore, the development of entrepreneur resources who value the coordination between innovation and entrepreneurship is a major premise for enhancing the economic dynamic efficiency, and is also a necessary condition for improving convergence of efficiency in the macro and micro levels. Thirdly, introducing the economic dynamic efficiency into the analysis framework would break through the set pattern of allocation efficiency in traditional study which is confined to spatial dimension, and expand the connotation of allocation efficiency to time dimension. Based on it, the study of dynamic comparative advantage with the characteristic of deepening labor division could be placed in the real world, and its reality explanation is increasing. In the process of market size expansion caused by deepening specialization, space-time for entrepreneur allocating production factors is bound to expand, so that entrepreneur’s performance in "learning by doing" and their business ability would improve, then the allocation efficiency would be enhanced. Hence, the development of entrepreneur resources which results in the improvement of allocation efficiency would make spiral, endogenous and positive interaction with the expansion of market extent, so as to improve the sustainable promotion of dynamic comparative advantage.(4) Expansion of market size would be accompanied with an increase of trade cost. The only way of reducing trade cost is to deepen the market-oriented reform to dissolve the barriers of economic system. This can provide a useful institutional guarantee for China’s sustainable improvement of dynamic comparative advantage. The institutional barriers would be dissolved from the following two aspects:on the one hand, establishing and perfecting the market system would stimulate the endogenous driving force and vitality of entrepreneur to establish business and make innovation; on the other hand, perfecting morality, law and property rights protection system could regularize the conduct of market main body, make all the participants have more clear expectation, so as to promote the social trade efficiency remarkably. Based on that, the sustainability of China’s endogenous enhancement of comparative advantage would be quite promising.The premise of traditional comparative advantage theory usually has the characteristics of static and exogenesis, which is not consistent with the reality. This study breaks through the limitation of traditional comparative advantage. In the perspective of entrepreneur resources development, it explores the path for the sustainable increase of dynamic comparative advantage and its realization ways, which is still rare in the frontier of comparative advantage theory and measurement authentication level. It quantitatively estimates the entrepreneur resources and reveals its high correlation with the institutional environment, which, to a certain extent, makes up for the deficiency of the current related research in this aspect. It reveals the special importance of entrepreneur resources for China, and points out the entrepreneur resources development is exactly a shortcut for China’s economic transformation and upgrading, and the enhancement of comparative advantage. The innovations mentioned above are the theoretical value and practical significance of this study.