International Trade And The Total Factor Productivity Of Region

The effect of trade on economic growth has always been one of the hot topics that many scholars research. As long as the style of trade development has been paid more attention, many scholars have turned their concentration to the relation between international trade and total factor productivity. However, the previous researches of this topic mainly focus on the trade between different nations, with less attention to the trade of different regions within one country. Comparatively, regional trade covers more things. Regional trade contains two aspects: the inter-regional trade and international trade. This article chooses Wenzhou as a research object, because the trade openness of it follows a representative path which is inter-regionalizing first and then internationalizing. As a result, the research of this region would be worthwhile.This article emphasizes relation between trade and TPF. The latter one points to the ratio of total output and input. In another word, TFP is a comprehensive concept, and it can be regarded as a "black box", and it is formed with different factors which contain technology progress, scale economy and institutional changes. This article tries to open the "black box", and analyzes the respective relation between trade and technology progress, scale economy and institutional changes of Wenzhou.This is composed with six parts. The first part gives the background and destination of this research and the structure of the article. Second part reviews the previous relative theory and empirical study. The third part analyzes the theoretical relation between trade and TFP. The fourth part estimates the overall effects of the trade on TFP according Wenzhou's situation. In the fifth part, this article adopted DEA method to calculate the TFP changes in the period of 1992-2006 of Wenzhou. At last, a conclusion can be drawn that import and export has long-term relations with TFP respectively. What's more, export is a Granger Cause of TFP, but not evidently. While import is a evident Granger Cause of TFP. According to this result, this article analyzes the likely reason, and also proposes some political suggestions in the sixth part.