A Study On The Mechanism Of Import Promoting Economic Growth

The theme of this thesis is the mechanism of import promoting economic growth. That is to say, what is the relationship between import and economic growth? how can import promote economic growth ? and what conditions are necessary ?The existent studies about the relationship between foreign trade and economic growth mainly focus on the effect of export or net-exports on economic growth, and few papers care about the promotion effect of import on economic growth. However, it is proved that no country's economy can develop well without certain import. Seeing that, the thesis tries to study this topic both theoretically and empirically, hoping to make some contribution for the field. In details, the thesis is mainly composed of four parts, following the logic order of "Question---Analyze---Propose":In the beginning of Chapter1, we introduce briefly the basic knowledge on import and economic growth so that we can analyze smoothly later. Then, we review the relevant theory. Based on synthesizing the theory we conclude a comparative integrated mechanism of import promoting economic growth in terms of a graph. To specify concisely, we decompose it into 5 function modes by factors propelling economic sustainable growth and elaborates them respectively: 1,import accelerates economic growth by launching into more productive factors. 2,import speeds economic growth by stimulating technological advancement. 3,import boosts economic growth by propelling institutional innovation. 4,import facilitates economic growth by optimizing industrial structure. 5,import hastens economic growth by accumulating human capital.Following that, we expatiate the conditions that are necessary for the mechanism: 1,import must be arranged within reason. 2,import must keep to the comparative advantage principle. 3,productive factors and products can flow freely among different industries,areas and corporations. 4,foreign trade policy must be harmonious with other policies。Chapter 2 examines whether the above mechanism works in China by empirical study with macroeconomic data of our country. The result shows that:1,import does promote economic growth in China, but there is a bit time lag. 2,import speeds economic growth by stimulating technological advancement. However, as far as the absorption capability of Technology Spillovers concerned, the effect is weakened dramatically. 3,optimized industrial structure resulting from import also has a significant impetus to economic growth in long term. To sum up, although the result is not as perfect as anticipated, it is correspond partially with former analysis.Chapter 3 tries to find out the root causes of the above result through analyzing the disparity between the ideal conditions stated in chapter 1 and the real situation of China. The reasons are as follows: 1,unreasonable arrangement of import and unperfected market system keep traders importing the real advanced stuff, make domestic companies won't or can't imitate,digest,absorb and re-innovate the advanced technology imported. In such case, MNCs are not willing to transfer the real advanced technology. Therefore, import just has little impetus to economic growth by stimulating technological advancement. 2,That import hastens essentially economic growth by optimizing industrial structure is mainly due to the mature product market in China and the conformity of import and industrial policy, while the reasons leading to the time lag are the immature market of product factors,the unhealthy link of industry and the objective rule that it will take a period of time for the new to substitute the old.According to the reasons mentioned, chapter 4 brings forward some relevant suggestions to strengthen the mechanism: 1,the import should be encouraged in quality and optimized in structure. 2,It's urgent to build up the mechanism of market economy by means of intensifying company's own capability,creating the market full of furious competition and perfecting the market of productive factors. 3,When making import policy, we'd better take industrial policy and FDI policy into consideration so that all these policies can make contribution for sustainable economic growth in harmony.The thesis has several innovations such as trying to study the dynamic contribution of import to economic growth, trying to combine the mechanism and the conditions it needs, and so on. However, it doesn't analyze whether and how can import hasten economic growth by accumulating human capital and optimizing industrial structure, for unavailability of relevant data.