The Mechanism And Empirical Research About The Effect Of Export Diversification,Technological Complexity On Economic Growth In China

Since the reform and opening up policy implemented, China’s economic growth has made remarkable achievements. Especially after joining the WTO, the economy has maintained rapid growth. Among the troika which can stimulate the economy growth, the contribution of exports to economic growth ca n’t be ignored. Nowadays, China has surpassed Germany, becoming the world’s largest exporter. However, the financial crisis in 2008 has fully exposed the vulnerability of economic growth in China to external shocks. So, how to maintain export’s to stable growth has become the focus of study of many economists. Up to now, many studies have demonstrated that export diversification is helpful to promote economic growth. But whether this conclusion fit China, which is worthy to be studied. On this basis, the paper added technological complexity to measure the technical level of a country’s export structure,and put forward econometric model to examine the impact of diversification and technological complexity on regional economic growth.This paper used entropy index and Hausmann method to measure 31 provinces’ export diversification and technological complexity from 2002 to 2011 in China. The results showed that Shandong, Zhejiang and Anhui have relatively high level of export diversification, while Qinghai and Ningxia have relatively low level of export diversification. This corresponds to location and economic development of each province. As a whole, the average export diversification showed a fluctuated trend. The export diversification of eastern region is obviously higher than central and western regions, it shows general tendency to decline. The export diversification of western region is lower than the national average, but it showed a strong growth trend after 2008. In addition, the average of technological complexity of Beijing, Tianjin and Shanghai are very high during th e sample period, Guizhou and Qinghai are relatively low. Export technological complexity of each province showed a rising tendency. Technical complexity of eastern, central and western regions show ed a ladder structure, the eastern region is the highest,central region less,western region the least, and the gap is expanding.Then, based on the endogenous growth theory, this paper constructs econometric models, using 31 provinces’ panel data to examine the impact of diversification and technological complexity on regional economic growth. By the method of system GMM we derived: both export diversification and technological complexity have a significantly positive effect on regional economic growth, while different related varieties has different impact on ecomic growth. Related variety is conducive to economic growth, unrelated variety has a negative influence on economic growth. Finally, the paper provides some policy recommendations according to the conclusion we derived for how to promote economic growth.