An Empirical Analysis On The Influencing Factors Of Export Technological Sophistication InProducer Services Trade

In the 21st century, global production patterns continue to segment. The vertical specialization and fragmentation model of the industry chain provides a stage for the producer services business to play a big role. With the ’value-added index’ becoming more inportant in international trade competition, using technological sophistication to measure the business structure has gradually become a consensus. This paper measured the producer service’s export technological sophistication of 41 sample countries and tested its influencing factors through theoretical & empirical model.In the theoretical part, this paper constructed a production function with characteristic of increasing returns to scale for labor productivity of producer services sector, by combining endogenous growth theory and "cost discovery" model. The "cost discovery" model was made by Hausmann (2007) from the microscopic point of view to discribe the select mode of individual business. Through theoretical analysis we found that the factors affect the export technological sophistication in producer services sector.By using 41 cross country panel data from 1997 to 2013, this paper conducted an empirical analysis for factors influence export technological sophistication of producer services trade based on our theoretical model. Fixed effects GLS estimator and the system-GMM-estimator were the main methods we used. The results show that, from a global perspective, the accumulation of physical capital and human capital on has a significant role in promoting export technological sophistication of producer services trade. Natural resource stock may set a limit on an economy’s technological progress which has been discribed as "resource curse" effect. Further broken down country grouping samples, we found that the impact of FDI and import is more significant for low-level-income countries. In the estimation of middle-level-income countries, we can see that the coefficient of per capita land area and its cross variable with policy regimes are positive, indicating that natural resources are not a "curse" in some cases. As long as the government formulates appropriate policies and economic system, resources will be a positive role obviously.On the basis of theoretical analysis and empirical results, this paper made the following recommendations on Chinese Producer Services:(1) to further the liberalization of producer services industry barriers to entry, and create a fair competitive environment; (2) to strengthen investment in R&D and education system, improve intellectual property protection mechanisms; (3) to optimize the layout of the producer service industry, and accelerate the integration development of three industrial sectors; (4) deeply involved in mixed ownership reform, to develop financial and advisory services; (5) grasp the new opportunity of "The Belt and Road" to promote the international transfer of producer services industries.