Study On The Foreign Trade's Growth Mechanism And Its Motive Power Transformation

International trade, being a significant component of the operational mechanism of the world economy and an important part of china's national economy, is playing a more and more important role in china's rapid economic development. Thus, study on the foreign trade's growth mechanism and its motive power transformation will provide a basic and significant way to understand the fundamentals of international trade, and it will also provide ways to improve the development environment of our country's foreign trade and change its growth mode.Our research is carried out in three levels in this paper. Firstly, it analyses the force and function mechanism of the growth of foreign trade from a macro angle. Logic inference and mathematical reasoning are both applied to explore the factors having impact on foreign trade's dynamic growth. Secondly, it uses economic methods to deduce the factors affecting the transformation of motive power of foreign trade and seek ways to achieve the transformation. Thirdly, empirical study is made on institution and knowledge's effect on the growth of foreign trade.In view of the theory of comparative advantage's limitation in adaptation, this paper expands its connotation and maintains that comparative advantages should not only contain tangible factors, but also contain intangible factors and administration resources. Intangible factors are usually in terms of technology, knowledge and administration resources are in terms of the institutional efficiency of government's interference in resources distribution and incentive mechanism. On this basis ,it works out a revised 3×2×2 H-O model including knowledge factor under the hypothesis of benefit increment and imperfectly competitive market. Through applying production function, utility function and economic mathematics methods, it infers and demonstrates that factors such as technology, knowledge and economies of scale play a greater role in promoting the growth of international trade compared with traditional endowment factors. By using the study on competitive advantages for reference, we put forward that a country or a region's competitive advantages in foreign trade are reflected in the export capacity of each industry and the level of export industries. A dynamic structure modal of the growth of foreign trade is constructed, which consists of three principle motive powers, such as institution innovation, the release of competitive advantages of factor endowment and the endeavor from micro-main body. Besides, it contains exertion of the static comparative advantages, cultivation of the dynamic competitive advantages and the motive power forming mechanism of the competitive advantages in foreign trade.Basing on our analysis of the factors determining competitive advantages, it brings forward the "Six Factors Modal" affecting competitive advantages of foreign trade, which consists of human capital, transaction cost, technology innovation, and economy of scale, policy factor and the compatibility of internal and external institution. It analyzes how institution affects competitive advantages in foreign trade through affecting the above-mentioned six factors. Based on data of 92 countries in the year of 2005 and 2006, an empirical study using logarithm regression method is carried out to test the relationship between the competitive advantages and the institution factor. The result shows that the factors that affect the competitive advantages most in foreign trade is not a country's economic institution, such as trade institution and monetary institution, but the institution affecting the cost of enterprise's operation and the formal law institution, for instance, wage policy, deal of black market, the degree of perfection of one country's law and institution and so on. Then, it defines and elaborates knowledge's economic characteristics and endowment, which shows that knowledge endowment bears such economic characteristics as innovation accumulation, endophytism, marginal cost diminishing, economy of scale and so on. It affects growth of foreign trade in a direct or indirect way through its impact on scale, structure, cost, and terms of foreign trade. Choosing the data of 1985 to 2005 as our sample, this paper makes an empirical study on the correlation of China's R&D and education input and foreign trade's scale and structure by applying co-integration and Granger causality test. The result shows that China's knowledge input are co-integrated with volume of export and import and structure of foreign trade in a long run, and it is granger of gross import and export structure.In economic view of transaction cost and transaction efficiency, it analyzes of the role of competitive advantages' utility and upgrading, transaction efficiency, institution arrangement and government's function in the transformation of comparative advantages into competitive advantages. Thus, a modal of factors affecting comparative advantages' transformation into competitive advantages is worked out. By using super marginal analysis, we examine the effect of transaction efficiency's improvement on trade pattern. From the aspects of China's multinational investment and China's use of FDI, FDI's great importance in comparative advantages' upgrading and improvement of transaction efficiency is also analyzed. Then, it is put forward that FDI becomes an efficient way in achieving comparative advantages' transformation into competitive advantage and foreign trade's dynamic growth.At last, the analysis of China's current foreign trade situation shows that China's international competitive ability in foreign trade remains relatively weak and China still has a long way to go in becoming a strong trading nation. The current static comparative -advantages-oriented foreign trade strategy, however, doesn't keep abreast of the times. Thus, it is put forward that it is now suitable for China to establish export structure according to the national industry matrix and adapt the competitive-advantages-oriented foreign trade strategy, and enable enterprises, government and intermediaries to play their parts to full in foreign trade comparative advantages' transformation into competitive advantages.