An Empirical Analysis on the Relationship between Import-based Service Trade and Economic Growth in

1.0 Introduction  引言
 

The service trade is becoming the emphasis of the global economic competition gradually, since the 1990s. The role in promoting economic growth of international trade in service is presenting piece by piece. Weissm& Jeffrey (2009) pointed out that the essential changing of this kind of economic service-oriented nature in some developing countries is based on the momentous adjustment of global industries’ structures, which caused by the technological revolution. Therefore, the international trade in service shows an important strategic position in the international economic development, as the most dynamic source of economic growth.

服务贸易从90年代正逐步成为全球经济竞争的重点。服务促进国际贸易的经济增长中的作用是一步一步的。维森和杰弗里（2009）指出，在一些发展中国家的重要变化是基于全球产业的结构，这造成了技术革命的重大调整。因此，服务业的国际展览，在国际经济发展中占有重要战略地位，成为经济增长最有活力的来源。
 

In recent years, the Chinese import-based service trade has the rapid development, which the trade amount has already from 23.4 billion dollars increased to 83.8 billion dollars from 1987 to 2005 (Kamin, et al, 2006). It has shown that the extensive development of international service trade had the huge impact on the Chinese trade in service, which brought a positive contribution on the China’s rapid economic development. As a developing country, the economic output of China is in the sixth position in the world. The service trade plays an important role in the process of Chinese economic development, and its development can stimulate the export of tangible goods, increase the GDP, promote the economic structure adjustment and accelerate the development of the basic industries in China. In addition, the event of China joined into WTO in 2001 brings a better opportunity, so that grasping the empirical relationship between service trade and economic growth and analyzing the function which caused by both service trade and economic growth can help country to choose a rational pattern for service trade by a reasonable choice. Therefore, the research question for this paper is to indicate the relationship between the import-based service trade and economic growth in China.

近年来，中国以进口为基础的服务贸易的迅猛发展，其交易金额早已由234亿美元增至838亿美元， 1987至2005年（卡明等， 2006） 。这表明，国际服务贸易的广泛发展，对中国的服务贸易的快速发展带来了巨大冲击。作为一个发展中国家，中国的经济总量在世界第六位。服务贸易中起着重要的作用，在中国经济发展过程中，其发展可以带动有形商品的出口，增加国内生产总值，推动经济结构调整，加快基础产业在中国的发展。此外，中国于2001年加入到世界贸易组织带来了更好的机会，从而使抓服务贸易与经济增长之间的经验关系，并分析造成双方的服务贸易和经济增长的功能，可以帮助国家选择一个合理的模式通过合理选择服务贸易。因此，本文所要表明的是中国的进口为基础的服务贸易和经济增长之间的关系。#p#分页标题#e#
 

2.0 Literature Review  文献回顾
 

Until now, there are many achievements on the service trade and the results on the relationship between the service trade and economic growth by both overseas researchers and Chinese researchers.

 

2.1 Theories on Service Trade

2.1.1 Comparative Advantage Theory on Service Trade

Hunt & Morgan (1995) indicated that the traditional comparative advantage theory is always the basic approach for explaining the causes and patterns of the international trade, which brought forward by Adam Smith and David Ricardo. The theory has shown that there are differences between the labor productivity and technology, which is the reason why the prices are different for the same product which produced by different countries. This difference on pricing is the reason and momentum for international trade. Based on the revealed comparative advantage theory, there is no exception on service trade. Hereby, Dowling & Cheang (2000) has shown the comparative advantage of a country is represented on the high production efficiency on services, so that the countries those participate in trades can get profits through export high efficiency services and import low productivity efficiency services.

 

2.1.2 Factor Endowment Theory on Service Trade

The factor endowment theory is the new threshold of modern international trade theories. Fujiwara & Shimomura (2005) has mentioned the endowment different between two countries is not only can explain the difference on price among commodities, but also can indicate the difference on price between services. Hence, the comparative service trade’s advantage of a country can be represented intensive using the production element’s services with relative abundant endowment (Davidson, 1979). The country can get earnings through export relative abundant endowment’s services and import relative scarce endowment’s services for increasing the economic growth.

 

2.2 The Relationship between Service Trade and Economic Growth

There are many researchers have studied the functions of service trade for economic development until now. First of all, Datta & Mbarika (2006) has pointed out that the service trade has already become the tractive power for economic competitiveness and the catalyst for the economic innovation and economic globalization. And then, the service trade can improve the operation efficiency of economic, which good for transferring surplus labors and increasing the markets (Hendrik, 1997). Moreover, Datta & Mbarika (2006) has also shown the service trade makes the inflow of foreign capital for making up the disadvantages of lack of domestic funds. Therefore, there is the closed relationship between the service trade and the economic growth in the international trade.

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In addition, there are some empirical studies on the relationship between service trade and economic growth. Aaditya (2006) had studied the relationships between GDP and six main service industries by assuming actual average GDP per person as the independent variable and the expenditures of service industry as dependent variable. The result of linear regression pointed out that there is no significant positive correlation between the actual expenditures of service industry and income level. Compared with that, Chang (2005) has already indicated the opposite opinion which is the service trade has the obvious contribution on GDP’s growth. They have shown the correlation coefficient is 0.9829 and the regression coefficient is 12.4125, for the trade volume of import and export and GDP. Moreover, there is a very strong positive correlation between the export sales and the output of non-service export department, which the correlation coefficient is 0.969 and the regression coefficient is 21.04. Hereby, the result pointed out the contribution of export-based services on GDP’s growth is far greater than it on total volume of service trade.

 

3.0 Methodology  方法
 

3.1 Research Model

For researching the relationship between the export-based service trade and economic growth, this study will use the traditional liner regression model for analyzing the correlation by correlation coefficient. The software SPSS will be used in this paper for getting results of regression model. Therefore, the regression model for this paper is:

 

 

3.2 Testing

 

Although the correlation coefficient can simply represent the relationship, there still have some limitations about the traditional regression model. First of all, the time series data for the regression analysis must have the characteristic of stationarity as sample data, which is the precondition. It will be used Augmented Dickey Fuller (ADF) to test the unit root for checking the stationarity (Weber, 2001). For the non-stationary variables, it needs to test the stationarity of their differential. Secondly, the Granger’s causality testing will be used to identify the issues if and how these variables have the causality, which can supply better understanding about the research question. Thirdly, Johansen (1995) has indicated that the traditional ordinary least square (OLS) can be used to point out the time series for variables in the two variables regression model, which is the cointegration testing. In addition, Engle& Granger, (1987) mentioned the error correction model is so important, which is the extension of cointegration analysis. The cointegration reflects the relationship of long-term equilibrium, so that the error correction model is used to modify variables if it has departure phenomenon in the short-term period.

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