‍Flow of production factors, region foreign trade growth, transformation and upgrading——empirical analysis on PVAR model

LU Shanyong1 LI Guoying1

(1.Business School, Guangxi University, Nanning, Guangxi, China 530004)

【Abstract】This article analyzed the panel data of 29 provinces of China between 1986 and 2013 by using the panel vector autoregressive model (PVAR) and concluded that the flows of three types of factors of production, namely labor, capital and technology have positive impacts on the growth rate of regional foreign trade. This is because the flows of factors of production enhance the advantages of factor endowments and is conducive to the competitive edge of endogenous competition and of transaction efficiency, which are in line with the foreign trade development strategy proposed in the theory of integrated advantage. Therefore, it is necessary to continue the acceleration of flows of productive factors, improve the efficiency of resource allocation, transit and upgrade regional foreign trade based on the principles of integrated advantages.

【Keywords】 flow of production factors; growth of regional foreign trade; Panel Vector Auto Regression (PVAR); integrated advantage;


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(Translated by JIN Xiaohua)


    [1]. [1]. The data of Chongqing are merged into Sichuan because Chongqing was not a municipality until 1997. In addition, the data set of this article does not include Tibet due to a large amount of unavailable data. [^Back]

    [2]. [1] Factor intensity refers to the relative proportions of two kinds of factors of production in the production of a certain product. Factor intensity reversal refers to the scenario that with regard to the CES models of production, even if the production functions are the same for both countries, as long as the elasticities of substitution in the production of two commodities are different, one country will violate the theory of comparative endowment advantages by exporting its product of scarce relative factor endowment. That is, if the substitution effect is outstanding, capital-intensive products will revert into labor-intensive products while the original labor-intensive products will revert into capital-intensive products. [^Back]


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This Article


CN: 11-1047/F

Vol 37, No. 12, Pages 31-38

December 2015


Article Outline


  • 1 Introduction
  • 2 Literature review
  • 3 Model building and descriptive statistics
  • 4 Model testing and analysis of estimation results
  • 5 Conclusions and suggestions for countermeasures to the transformation and upgrading of regional foreign trade in China
  • Footnote