Home Market Effect And Binary Margins Of Cultural Export

With the development of globalization,economic and cultural exchange between nations is becoming increasingly extensive and deep.Meanwhile,the demand of cultural goods around the world has risen to a higher level.Cultural Trade and cultural industry have turn out to be a critical part f of a nation?s long-term development.As a big trading nation in the world,China entered into cultural trade early and has now become one of the largest source of cultural goods.In spite of its enormous cultural trade,there are obvious shortcomings like poor content,irrational structure,low quality and so on,which would undoubtedly impede the long-term development.On one hand,the status quo and future of China' s cultural trade are still worthy of continuing exploring;on the other hand,Home Market Effect(HME),due to its prominent influence on one country' s export,has long been researched by domestic scholars,though few are in relation with cultural trade.Thus,this article is trying to study the possible effect of HME on cultural export,and then offer some practical suggestions based on our research.On the basis of cultural goods' classification issued by UNESCO in 2009,we select China's cultural trade data with 40 nations from 2007 to 2016,which cover 6 categories and 85 kinds of cultural goods.We do data analysis in order to describe the status quo of China' s cultural trade and we also do empirical analysis on the influence of HME with the help of extended model of gravity equation.Following are the main parts of our study:First,we review some classical papers on cultural trade and HME.As the study on cultural trade goes deeper,the core topic evolves from current situation and trade competitiveness to the dual margins of cultural trade.Meanwhile,the study of HME is mostly focused on traditional trade instead of cultural trade.With the rising importance of cultural trade,it' s necessary to explore what HME means to cultural trade.Second,we use the trading data of HS 6-digit code cultural goods to analyze the scale,structure and competitiveness of China' s cultural trade.In total,despite its bulky trading volume,China's cultural trade is relatively sensitive to the demand,and its overconcentrated product varieties and target markets make things worse.From the perspective of trade competitiveness,China goes to the top because of its incomparable volume,however,it' s shaky just like the trading volume and goes down in recent years.Based on above study,we,inspired by Hummels&Klenow(2005),decompose China's cultural trade into intensive margin and extensive margin(the so-called dual margins),which offers us a comprehensive and thorough outlook in its trade with the world and also different nations.As the dual margins suggest,the growth of China' s cultural trade rely upon the increasing intensive margin,though which fluctuates frequently;and the extensive margins as a whole reside at the high level while distribute unequally across the trading partners.Third,enlightened by Schumacher&Siliverstovs(2006),we use the extended gravity equation to do empirical analysis on HME.Beside of HME,we also take fixed trade cost,variable trade cost(measured by geographical and cultural distance)and other factors into consideration.As the result shows,HME remarkably promote the growth of intensive margin while somehow hinder the increase of extensive margin to a insignificant degree;fixed trade cost has significant negative effect on the dual margins;geographical and cultural distance are non-significant factors of the dual margins;population of the trade partner and whether it is a developed country could influence the dual margins to a certain degree.Based on above conclusions,we provide suggestions mainly on three points:deal with the structural disadvantage,develop domestic market and reduce fixed trade cost.