The Research O F Home Market Effect Of China’s Manufacturing Industrial Export

Within the framework of Monopolistic Competition and Increasing Returns to Scale(IRS-MC for short),Home Market Effect refers that supernormal demand from a country will produce mass production and improvements in productivity, which can meet the home market demand and also the overseas demand, and at last advance export trade to be a net exporter. Traditional comparative advantage had once been the only factor of the comparative advantage of the China’s manufacturing export industry. With the development of the economy, increasing of the factor costs like the labor costs can’t explain the growing export trade in our country, which means that Home Market Effect have been the new direction of the manufacturing export trade research in our country.On the basis of the conclusion and summarization of the related theory and the empirical studies, this paper arranges the basic theory of the Home Market Effect, and its close relations with the industrial structures and the trade cost. And it also presents the hypothesis analysis of the operating mechanisms of the Home Market Effect. The empirical analysis of this paper, firstly, demonstrates the existence of the market effects in the manufacturing export industry in our country. And then it sets up the econometric model to analyses how the factors, such as the industrial agglomeration and the cost advantage, function in the Home Market Effect.Based on the conclusions, there are something important on the optimization and upgrading of the manufacturing industrial structures, the improvement of the export structures, and the adjustment between the industrial structures and the export structures.