Research On The Home Market Effect Of China's High-end Manufacturing Products Export To G20 Countries

In 1980,Krugman put forward to the theory of home market effect for the first time.He believed that under the premise of increasing returns to scale and trade costs,countries with large market demand for a product would become net exporters of the product.This theory provides a new perspective for economic research.At present,the global economic recovery is weak.Trade protectionism becomes popular again and the increasingly worsening in such complex conditions,especially the Sino-US trade war initiated by US President Trump since 2018 has accelerated the transformation and progress of the global trade situation.The future direction and strategic positioning of China's foreign trade is even more crucial,home market effect has become an important source of a country's trade comparative advantage.Based on this theory,this paper explores the home market effect of China's high-end manufacturing exports.By selecting the high-end manufacturing products defined by OECD from 2005 to 2016,this paper uses gravity model to test whether the high-end manufacturing industry in China and the G20 countries as a whole and the five sub-sectors of exports have home market effect.Empirical results show that there is a home market effect in China's high-end manufacturing industry as a whole,Expansion of home market size will promote product export.According to industry research,except for the aircraft and spacecraft industries,home market effect exists in four industries: pharmaceuticals,office,accounting,computer,radio,television and communication equipment,and medical precision optical instruments.The result value of home market effect is different in these industries.The increase of capital-labor ratio will promote the export of China's high-end manufacturing industry.Home market effect has become one of the major factors in the export of high-end manufacturing products in China.In this regard,We should speed up the adjustment and upgrading of China's high-end manufacturing industry,expand domestic demand,drive domestic demand to drive exports.At the same time,give full play to the function and advantage of home market effect and aim at home market effect to form industrial agglomerations.The scale effect will be generated to realize the long-term driving force and growth trend of China's high-end manufacturing export growth in the G20 countries.