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An Empirical Study on Suitable Openness of Provinces in China

Wang Xuguan

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Abstract

Based on the theory of the substitution between openness and market size,this paper studies the suitable openness of provinces in China through two-stage OLS.It finds that the openness of Shang-hai,Bei-jing,and Guang-dong are too high,and the foreign trade of these areas should not grow faster than the economy so as to maintain or reduce their openness.The openness of other provinces is still far away from their critical openness,and may continue to enhance the openness to promote economy growth.

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What this paper is about

Based on the theory of the substitution between openness and market size,this paper studies the suitable openness of provinces in China through two-stage OLS.It finds that the openness of Shang-hai,Bei-jing,and Guang-dong are too high,and the foreign trade of these areas should not grow faster than the economy so as to maintain or reduce their openness.The openness of other provinces is still far away from their critical openness,and may continue to enhance the openness to promote economy growth.

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Available abstract

Based on the theory of the substitution between openness and market size,this paper studies the suitable openness of provinces in China through two-stage OLS.It finds that the openness of Shang-hai,Bei-jing,and Guang-dong are too high,and the foreign trade of these areas should not grow faster than the economy so as to maintain or reduce their openness.The openness of other provinces is still far away from their critical openness,and may continue to enhance the openness to promote economy growth.

Key concepts: Openness to experience, China, Economics, International economics, Political science, Psychology, Law, Social psychology

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