Domestic Distortion and Export Dependence:The Domestic Sales Dilemma of Chinese High-Intensity Exporters and Pol-icy Implications through the Melitz Model Extension
A considerable proportion of export enterprises are pure exporters or high-intensity exporters in various industries in China's manufacturing sector.The feature of this kind is significantly different from that of exporters in developed countries and is not con-sistent with the theoretical prediction of the Melitz model.This study points out that under the policy orientation of actively expan-ding opening-up to promote exports,the lagging reform of the domestic market and the domestic barrier hindering enterprises'do-mestic sales.Compared with other enterprises,these pure exporters or high-intensity exporters are younger and distribute more in downstream industries and highly monopolistic industries.Specifically,domestic distribution barriers and entry barriers are the key reasons for the formation of the export dependence phenomenon of local enterprises.Through analysis,it is found that pure export and high-intensity export enterprises tend to be younger,and are located in industries either concentrated in the down-stream of the industrial chain or in industries with higher monopoly in the domestic market.In view of this,this study constructs a heterogeneous firm model that integrates multiple market distortions to explain the ratio of domestic and foreign sales of Chinese firms.The model suggests that high distribution barriers and high entry barriers are what prevent exporting firms from selling in the domestic market:the high cost of product distribution reduces the profitability of firms selling domestically,while the high fixed cost of market entry directly reduces the profitability of new firms selling domestically,making it more difficult for new firms to survive in the domestic market.Based on the model,this paper further identifies industries with high distribution barriers and industries with high entry barriers in the domestic market and argues that eliminating export subsidies,further promoting market-oriented reforms,reducing the degree of monopoly in the domestic market,and smoothing distribution channels are the keys to helping new companies in different industries breakthrough domestic sales barriers and participate in the domestic market.
万方数据
维普
