Internal Trade Costs,Trade Liberalization And Regional Economic Growth

Since Adam Smith began to study economic development,each country has focused on economic growth because it reflects the degree of economic development of each country(region).However,from different perspectives,which factors contribute to economic growth,their focus is also different.Classical economics believes that the source of economic growth is the accumulation of capital and labor,while the theory of endogenous economic growth believes that technological progress has played a unique role in economic growth.Since China implemented the reform and opening up policy,the economy has achieved certain development and the economy has developed rapidly.At the same time,China's regional economic growth has also become unbalanced.For the current imbalance in China,the reason can be said to be benevolent and benevolent.I believe that the degree of openness in a region and the cost of conducting internal trade will cause certain differences in the economic growth of various regions in China.This paper analyzes the two aspects of trade liberalization and internal trade costs,and uses the panel data of the degree of openness and internal trade costs of various regions in China to analyze its correlation to regional economic growth.This paper briefly summarizes the previous research results.Firstly,it analyzes the promotion mechanism of internal trade cost to trade and FDI,and promotes economic growth by analyzing the impact of lower internal trade costs on foreign trade and foreign direct investment.As the degree of integration of domestic markets in a region gradually increases,and due to economies of scale,competition and learning,the reduction of internal trade costs will promote the development of foreign trade,thereby promoting regional economic growth.In addition,the degree of integration of the domestic market has an impact on regional specialization and diversification of foreign direct investment,and the higher the degree of specialization and the diversification index,the more favorable it is to attract foreign direct investment,thus contributing to economic growth.Secondly,from the theoretical point of view,it analyzes the mechanism of trade liberalization to promote regional economic growth through foreign trade and foreign direct investment.Finally,the mechanism of internal trade cost to economic growth is analyzed.Under the core-edge model of a country,the impact of internal trade cost on economic growth is as follows:when internal trade freedom is low(the degree of integration of domestic market is low)The symmetrical structure is a stable equilibrium,and the core-edge structure has volatility.When the internal trade freedom is at the intermediate level,the state of the symmetrical structure and the core-edge structure is balanced and robust;the internal trade freedom is higher.At the level(the degree of integration of the domestic market is high),the core-edge structure is a stable equilibrium state,the symmetrical structure has volatility,and the economic activities are in agglomerated state,which can promote economic growth in one region;when trade is completely free,The equilibrium state of any structure is robust.Based on the analysis of the factors affecting economic growth,using the panel data of 31 provinces(cities,districts)from 2001 to 2016,the random effects model was used to examine how trade liberalization and internal trade costs affect economic growth.The empirical results show that:First,when measuring economic growth with the actual GDP growth rate,the impact of foreign trade openness and domestic market integration level on economic growth is significantly greater than zero,and domestic market integration has an important role in promoting economic growth.In the empirical test of sub-regions,from the regression results,the eastern region is generally more significant than the central and western regions,and it has the greatest impact on economic growth,followed by the central region and the western region.The model was tested for robustness using a differential GMM,and the results were still significant.Finally,based on the conclusions,this paper proposes relevant policies and suggestions for promoting regional economic growth and opening up new areas for regional development,with a view to providing some reference for China's future economic growth policy formulation.