| Since 1950s, the processing trade as a policy tool of achieving economic growth is used generally by developing countries. In practice, only small parts of countries and regions have facilitated it and become emerging industrialized countries, while others, especially some of Latin America countries, haven't acquired profits from processing trade, on the contrary, gotten off to"immiserizing growth". According to these distinctionless facts, this paper points out that the processing trade is a dynamic process of development. In the different stages of industrialization, the dominant factor is changing correspondingly. Particularly, with the development of industrialization the dynamic nature of processing trade will fully play the significant role instead of static staff. So, properly cultivating the dynamic factors is the premise of gaining greater economic growth via processing trade, which helps to implement the policy target. This paper expatiates the theoretic and realistic foundations of processing trade, combining dynamic and endogenetic comparative advantage theories. And it supposes that dynamic effects of processing trade are the driving forces of upgrading in export structure, through the ECM model of value of import/export of processing trade and per capita GDP, which expresses long-term dynamical relationship between processing trade and economic growth. Furthermore, it applies to the concept of"Sophistication"to empirically examine the export structure and the upgrading effect of processing trade. It is proved that there has been causality from industry upgrading derived from processing trade to export structure. At last, this paper based on empirical results argues that the government should regulate promoting policies of processing trade, which convert to high sophistication scores and long linkages strategies, strengthen supervisal functions to facilitate processing trade to acquire economic profits realistically. |
