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A study on transport costs and China’s Exports: An extended gravity model

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Abstract

This paper suggests an extending conventional gravity model design to empirically analyze the effect of transport costs and port efficiency on China’s export flows. It shows that factor endowment and transport costs variables affect export trade value in directions that New Trade Theory (NTT) predicted. Also, the evidence indicates that, controlling for the effects of transport costs on trade, variables in traditional gravity model are consistent with previous empirical studies in both magnitudes and directions. Moreover, more than 22% of the variation in Chinese export trade can be explained by those three variables alone. The findings reported in this paper empirically explains how seriously transport costs and port efficiency affect China’s export growth by comparing effects of labour production factor costs on external trade. It suggests that the improvement of port efficiency and reduction of road transport costs play a vital role in China’s export competitiveness in the global market.

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Acknowledgements

The authors are very grateful to Prof. FANG Shu-Cherng of North Carolina State University, USA for his advice and help in research and writing of this paper.

Author information

Authors and Affiliations

  1. Collaborative Innovation Center of eTourism, Beijing Union University, Beijing, 100101, China

    Lizhi Xu

  2. Tourism Institute, Beijing Union University, Beijing, 100101, China

    Lizhi Xu

  3. Department of Management Sciences, City University of Hong Kong, Hong Kong, China

    Kin Keung Lai

  4. School of Economics and Management, University of Chinese Academy of Sciences, Beijing, 100190, China

    Han Qiao & Shouyang Wang

  5. Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing, 100190, China

    Shouyang Wang

Authors
  1. Lizhi Xu
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  2. Kin Keung Lai
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  3. Han Qiao
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  4. Shouyang Wang
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Corresponding author

Correspondence to Han Qiao.

Additional information

The research was partially supported by the National Natural Science Foundation of China under Grant Nos. 71390330, 71390331, 71390335, 71373262, and 71373023, Funding Project for Academic Human Resources Development in Beijing Union University under Grant No. Rk100201509.

This paper was recommended for publication by Editor ZHANG Xun.

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Xu, L., Lai, K.K., Qiao, H. et al. A study on transport costs and China’s Exports: An extended gravity model. J Syst Sci Complex 30, 1403–1424 (2017). https://doi.org/10.1007/s11424-017-5191-z

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  • DOI: https://doi.org/10.1007/s11424-017-5191-z

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