Study On The Influence Of Institutional Quality On Export Domestic Value-Added Rate

With the continuous deepening of the division of international trade,the content of domestic value added in import and export trade has increasingly become the criterion for judging a country’s trade gains(Pascal Lamy,2011).Most reports indicate that China’s export value-added content is generally low,and increasing domestic value added of exports may enhance China’s position in the global value chain.And an important step to narrow the gap with developed countries.The quality of a country’s institution is an important indicator for measuring the level of state governance.It has the meaning of promoting economic development,and is also an important basis for whether the country can actively participate in the international division of labor.The Fourth Plenary Session of the 19th CPC Central Committee emphasized the need to build a institution system with complete institution,scientific norms,and effective operation.It can be seen that the perfection of the institution may be a key breakthrough to promote the high-quality transformation of China’s export trade.A country with better institutional quality means that its social development environment is better,it can give full play to its development potential,reduce trade friction,and enhance its international competitiveness.Under the multiple backgrounds of unstable international economy,rising trade protectionism and demographic structure,China’s economic development model has been subject to many constraints and challenges.Changes based on a country’s institutional level may provide more effective development of international trade.Long-term support,so exploring the link between the quality of national institutions and the domestic value-added rate of exports is of great significance for accelerating the structural transformation of economic development and promoting the development of high-quality and highly competitive economy.Based on the data from 42 countries in the WIOD from 2005 to 2016,this paper measures the domestic value-added rate and institutional quality of exports of various countries and compares them across countries.Based on the model of how the institutional quality affects the domestic value-added rate of exports,we examine differences In the case of qualitative systems,dynamic and static conditions and sub-samples,the mechanism of the effect of institutional quality on the domestic value-added rate of exports,and further use the simultaneous equations and replace the core variable indicators for robustness testing.Finally,the corresponding research conclusions and recommendations are proposed.The research finds that:(1)No matter the overall institution,social level,economic level and legal level,under the static conditions,it presents an "inverted U-shaped" impact mechanism,and the overall institution and economic institution are "inverted U-shaped" under dynamic conditions.The mechanism remains robust.(2)The domestic value-added rate of a country’s exports has a significant positive impact on its foreign capital attraction capacity,while it has a significant negative impact on the import of intermediate goods.That is,further strengthening China’s ability to attract foreign investment and reducing external dependence on intermediate products can help to improve the domestic value-added rate of China’s exports to a certain extent.(3)The overall quality of China’s institution is relatively low,and there is still a large gap between it and developed countries.There is still much room for improvement,and the institutional quality has not reached the threshold.It is still possible to promote the increase of the export domestic value-added rate of China’s by continuously improving its level.Therefore,this paper proposes the following suggestions:(1)Improve the institutional environment and create a good business environment.(2)Improve the institutional quality and accelerate the transformation of the institional dividend.(3)Strengthen the attraction of foreign capital and accelerate the absorption and transformation of foreign technology.(4)Gradually increase the added value of domestic products and accelerate the cracking of the low-end lock of China’s value chain.