A Study On The Effect Of Institutional Change In Interregional Trade: Theoretical Study And Historical Proof

Most of the traditional studies on the interregional trade always speak highly on the interests that come from the trade. These kinds of interests are usually called static interests of trade. However, with the development of the interregional trade, each regional player in this game can also gain another kind of trade interests more in a long-term which means the change of institution, the decline of opportunism tendency, the shrink of transaction fee. All of this trade interests can be called dynamic interests of trade.The effect of Institutional Change in Interregional Trade embodies the institutional kind of the dynamic trade interests which stands for the interregional trade participator'profits such as the improvement of its institutional structure, the diminishing of economic loss and the regulation of market economy. By using an efficient tool from the institutional economics, this paper holds a point that under the view of product relationship, the beginning of the interregional trade represents a kind of institutional change. The development of interregional trade will acting on the participator in two different ways which are paths in gradual-change and sudden-change.This paper also aims to find out what the late-developing region will gains besides the normal static trade interests when the interregional trade was carried out between early-developing region and late-developing region. After plenty of researches, this paper finds that late-developing region can achieve institutional late-developing advantage through the institutional overflow from early-developing region.To make the effect of institutional change in interregional trade theory being more convincible, this paper also uses a powerful tool in institutional economics which is called historical analysis. In order to prove the effect of institutional change in interregional trade does exist, this paper analyses the development of interregional trade in Ming and Qing dynasties which came along with the changes of financial institution, the industrial association, the regional customs and the peoples'ideology.