Abstract

Panel cointegration analysis of export facilitation and comparative advantages: The case of Chinese low-technology manufactures

Author(s): Yu Hong,, Jiayue Wang, Hongwei Su and Xiaowei Mu

This paper attempts to investigate the nexus between the comparative advantages and the net export capability by employing panel Granger non-causality analysis technique on a dataset of the Chinese low-technology manufactures for the period of 1987-2011. The results show that the net export capabilities significantly surpass the comparative advantages. However, there is no sign that the enhanced net export capabilities as the results of export facilitation have any statistically significant effect on the improvement of the Chinese comparative advantages in the low-technology manufactures. On the opposite, the comparative advantages Granger cause the net exports in both short-run and long-run. Further examination indicates that the short-run effect is negative while the long-run effect is positive, implying that in the short-run, the export facilitation targets at saving the deteriorating comparative advantages, and the long-run net export capabilities are essentially based upon the comparative advantages. At least for the low-technology manufactures, the Chinese export facilitation aims at employment and economic growth instead of the improvement of comparative advantages