The Effectiveness of China's Foreign Trade Liberalization

*Explanatory variable*	*OLS (1)*	*FE (2)*	*RE (3)*	*FE (year) (4)*	*RE (year) (5)*
Total GDP	2.317^** (0.058)*	2.233^** (0.224)*	2.285^** (0.222)*	1.917^** (0.126)*	1.939^** (0.122)*
Similarity index	0.970^** (0.014)*	0.784^** (0.091)*	0.858^** (0.063)*	0.821^** (0.081)*	0.908^** (0.058)*
Sum of K/L ratio	0.177^** (0.045)*	0.150 (0.184)	0.270 (0.179)	−0.166 (0.149)	−0.024 (0.135)
Difference of K/L ratio	0.070^** (0.023)*	−0.020 (0.037)	−0.010 (0.038)	0.009 (0.035)	0.017 (0.035)
Sum of T/L ratio	−0.276^** (0.052)*	−1.075^ (0.572)*	−0.328 (0.213)	−0.814 (0.558)	−0.269 (0.211)
Difference of T/L ratio	0.259^** (0.032)*	0.165 (0.137)	0.148 (0.115)	0.153 (0.131)	0.142 (0.112)
Distance	−0.553^** (0.056)*	(omitted)	−0.722^** (0.216)*	(omitted)	−0.795^** (0.209)*
RTA-APTA	−0.450^** (0.093)*	−0.338 (0.206)	−0.406^* (0.198)*	−0.329 (0.199)	−0.402^* (0.192)*
RTA-HONGKONG	2.326^** (0.129)*	−0.706^** (0.097)*	−0.667^** (0.083)*	−0.895^** (0.085)*	−0.839^** (0.069)*
RTA-MACAO	−0.088 (0.246)	−1.514^** (0.116)*	−1.610^** (0.083)*	−1.607^** (0.111)*	−1.697^** (0.083)*
RTA-ASEAN	0.544^** (0.087)*	−0.287^ (0.158)*	−0.285^ (0.162)*	−0.372^* (0.150)*	−0.375^* (0.156)*
RTA-CHILE	1.471^** (0.078)*	(omitted)	1.848^** (0.230)*	(omitted)	1.833^** (0.226)*
RTA-PAKISTAN	−0.194^* (0.091)*	−0.303 (0.201)	−0.304^ (0.175)*	−0.410^* (0.194)*	−0.419^* (0.169)*
RTA-NEWZEALAND	0.690^** (0.065)*	−0.241^* (0.099)*	−0.170^ (0.097)*	−0.404^** (0.080)*	−0.325^** (0.073)*
RTA-PERU	0.752^** (0.086)*	−0.088 (0.077)	−0.033 (0.067)	−0.112 (0.071)	−0.079 (0.058)
RTA-COSTA RICA	1.591^** (0.130)*	0.514^** (0.109)*	0.609^** (0.103)*	0.550^** (0.107)*	0.642^** (0.101)*
RTA – SWITZERLAND	0.894^** (0.043)*	0.244^** (0.090)*	0.234^** (0.086)*	0.244^** (0.082)*	0.247^** (0.073)*
RTA – ICELAND	−1.366^** (0.076)*	−0.501^** (0.115)*	−0.450^** (0.105)*	−0.517^** (0.096)*	−0.444^** (0.081)*
WTO	0.208^** (0.069)*	0.134 (0.081)	0.176^* (0.086)*	0.885^** (0.326)*	0.929^** (0.280)*
Constant	−11.519^** (0.732)*	−19.372^** (2.205)*	−10.729^** (2.550)*	−16.674^** (1.757)*	−7.578^** (2.141)*
F-test (P-value)		62.92 (0.000)		68.08 (0.000)
LM-test (P-value)			13056.20 (0.000)		13523.72 (0.000)
Hausman test (P-value)		13.96 (0.6701)		22.85 (0.9432)
R² overall	0.824	0.655	0.805	0.694	0.804
R² within		0.791	0.789	0.807	0.806
R² between		0.622	0.805	0.672	0.802
Number of Observations	2902	2902	2902	2902	2902
RETEST (p-value)	(0.7347)	(0.0062)	(0.0019)	(0.0000)	(0.0003)

Notes:

* significant at 10%;

** significant at 5%;

*** significant at 1%.

Robust standard errors in parentheses

Source: own estimations

Table 2

Dependent Variable: Total Exports

*Explanatory variable*	*OLS (1)*	*FE (2)*	*RE (3)*	*FE (year) (4)*	*RE (year) (5)*
Total GDP	2.337^** (0.080)*	2.324^** (0.248)*	2.337^** (0.226)*	1.996^** (0.150)*	2.005^** (0.136)*
Similarity index	0.920^** (0.013)*	0.833^** (0.093)*	0.858^** (0.062)*	0.870^** (0.090)*	0.903^** (0.061)*
Sum of K/L ratio	0.081^ (0.048)*	0.263 (0.146)	0.264 (0.171)	−0.040 (0.134)	−0.001 (0.117)
Difference of K/L ratio	0.087^** (0.024)*	−0.003 (0.038)	−0.001 (0.037)	0.024 (0.495)	0.024 (0.034)
Sum of T/L ratio	−0.446^** (0.053)*	−0.320 (0.572)	−0.344 (0.233)	−0.035 (0.540)	−0.271 (0.223)
Difference of T/L ratio	0.231^** (0.033)*	0.123 (0.144)	0.144 (0.128)	0.112 (0.132)	0.139 (0.121)
Distance	−0.460^** (0.056)*	(omitted)	−0.664^** (0.206)*	(omitted)	−0.747^** (0.205)*
RTA-APTA	−0.369^** (0.086)*	−0.450^* (0.218)*	−0.451^* (0.200)*	−0.446^* (0.207)*	−0.449^* (0.190)*
RTA-HONGKONG	2.760^** (0.127)*	−0.670^** (0.108)*	−0.575^** (0.084)*	−0.860^** (0.089)*	−0.747^** (0.068)*
RTA-MACAO	0.187 (0.235)	−1.606^** (0.118)*	−1.577^** (0.078)*	−1.706^** (0.113)*	−1.669^** (0.077)*
RTA-ASEAN	0.418^** (0.087)*	−0.306 (0.186)	−0.291 (0.179)	−0.410^* (0.175)*	−0.389^* (0.170)*
RTA-CHILE	1.052^** (0.078)*	(omitted)	1.221^** (0.227)*	(omitted)	1.216^** (0.230)*
RTA-PAKISTAN	−0.008 (0.092)	−0.221 (0.217)	−0.191 (0.195)	−0.347^ (0.204)*	−0.318^ (0.188)*
RTA-NEWZEALAND	0.520^** (0.057)*	−0.281^** (0.093)*	−0.262^** (0.093)*	−0.440^** (0.073)*	−0.407^** (0.069)*
RTA-PERU	0.426^** (0.067)*	0.363^** (0.067)*	0.361^** (0.061)*	0.374^** (0.066)*	0.356^** (0.056)*
RTA-COSTA RICA	0.215^ (0.121)*	−0.154^ (0.093)*	−0.128 (0.090)	−0.080 (0.091)	−0.600 (0.087)
RTA – SWITZERLAND	−1.310^** (0.045)*	−1.088^** (0.095)*	−1.101^** (0.087)*	−1.057^** (0.081)*	−1.048^** (0.072)*
RTA – ICELAND	−0.776^** (0.077)*	−0.255^* (0.101)*	−0.253^** (0.094)*	−0.237^** (0.082)*	−0.206^** (0.070)*
WTO	0.205^* (0.080)*	0.136^ (0.080)*	0.140^ (0.082)*	0.940^** (0.278)*	0.853^** (0.238)*
Constant	−13.999^** (0.732)*	−18.176^** (2.125)*	−12.221^** (2.611)*	−15.355^** (1.652)*	−7.578^** (2.141)*
F-test (P-value)		68.43 (0.0000)		74.81 (0.0000)
LM-test (P-value)			14333.58 (0.000)		14892.82 (0.000)
Hausman test (P-value)			42.95 (0.0005)		54.93 (0.0172)
R² overall	0.824	0.7843	0.8053	0.7604	0.8056
R² within		0.8110	0.8109	0.8280	0.8277
R² between		0.7770	0.7995	0.7460	0.7968
Number of Observations	2902	2926	2926	2926	2926
RETEST (p-value)	(0.1890)	(0.0182)	(0.0204)	(0.0283)	(0.0003)

Notes:

* significant at 10%;

** significant at 5%;

*** significant at 1%.

Robust standard errors in parentheses

Source: own estimations

Table 3

Dependent Variable: Total Imports

Explanatory variable	OLS (1)	FE (2)	RE (3)	FE (year) (4)	RE (year) (5)
Total GDP	2.590^** (0.097)*	2.115^** (0.230)*	2.425^** (0.263)*	1.910^** (0.186)*	2.093^** (0.200)*
Similarity index	1.395^** (0.028)*	0.559^** (0.203)*	1.094^** (0.122)*	0.565^** (0.197)*	1.181^** (0.112)*
Sum of K/L ratio	0.159^ (0.061)*	0.199 (0.334)	0.642^* (0.254)*	−0.040 (0.385)	0.402 (0.258)
Difference of K/L ratio	0.253^** (0.046)*	−0.061 (0.069)	−0.013 (0.073)	−0.039 (0.072)	0.021 (0.073)
Sum of T/L ratio	0.047 (0.591)	−1.716^ (0.984)*	0.390 (0.244)	−1.689^ (1.012)*	0.421^ (0.248)*
Difference of T/L ratio	0.356^** (0.054)*	− 0.118 (0.191)	−0.139 (0.147)	−0.121 (0.197)	−0.025 (0.147)
Distance	−0.943^** (0.090)*	(omitted)	−1.326^** (0.333)*	(omitted)	−1.338^** (0.328)*
RTA-APTA	−0.980^** (0.159)*	−0.364^ (0.205)*	−0.600^* (0.240)*	−0.382^ (0.214)*	−0.654^* (0.263)*
RTA-HONGKONG	0.624^* (0.247)*	−1.759^** (0.141)*	−1.827^** (0.132)*	−1.912^** (0.158)*	−1.967^** (0.140)*
RTA-MACAO	−0.481 (0.377)	−1.925^** (0.227)*	−2.459^** (0.135)*	−1.998^** (0.231)*	−2.551^** (0.145)*
RTA-ASEAN	1.060^** (0.128)*	−0.301 (0.376)	−0.293 (0.390)	−0.333 (0.150)	−0.375 (0.156)
RTA-CHILE	2.438^** (0.114)*	(omitted)	3.221^** (0.377)*	(omitted)	3.062^** (0.361)*
RTA-PAKISTAN	−0.470^** (0.176)*	−1.449^** (0.290)*	−1.214^** (0.250)*	−1.498^** (0.297)*	−1.280^** (0.253)*
RTA-NEWZEALAND	1.448^** 11111(0.124)*	−0.430^** (0.149)*	−0.162 (0.129)	−0.544^** (0.165)*	−0.263^* (0.126)*
RTA-PERU	1.848^** (0.146)*	−0.530^** (0.144)*	−0.378^** (0.114)*	−0.618^** (0.137)*	−0.485^** (0.110)*
RTA-COSTA RICA	4.386^** (0.251)*	0.796^** (0.220)*	1.337^** (0.209)*	0.737^** (0.221)*	1.348^** (0.206)*
RTA – SWITZERLAND	2.251^** (0.080)*	0.478^** (0.122)*	0.394^** (0.120)*	0.527^** (0.147)*	0.422^** (0.127)*
RTA – ICELAND	−1.097^** (0.144)*	−1.101^** (0.172)*	−0.802^** (0.136)*	−1.081^** (0.192)*	−0.757^** (0.139)*
WTO	0.481^** (0.126)*	0.165 (0.132)	0.342^* (0.144)*	0.284 (0.540)	0.867^* (0.425)*
Constant	−9.158^** (1.166)*	−24.027^** (3.915)*	−5.563 (3.861)	−22.489^** (3.765)*	−2.584^** (2.141)*
F-test (P-value)		25.30 (0.0000)		25.50 (0.0000)
LM-test (P-value)			5904.34 (0.0000)		6083.48 (0.000)
Hausman test (P-value)				119.57 (0.0000)
R² overall	0.7135	0.1801	0.6844	0.1675	0.6932
R² within		0.4320	0.4164	0.4443	0.4270
R² between		0.1238	0.7580	0.1089	0.7695
Number of Observations	2841	2841	2841	2841	2841
RETEST (p-value)	(0.0000)	(0.6031)	(0.0226)	(0.4223)	(0.0101)

Notes:

* significant at 10%;

** significant at 5%;

*** significant at 1%.

Robust standard errors in parentheses

Source: own estimations

References

Authors

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Articles in this issue

DOI: https://doi.org/10.2478/mgrsd-2020-0064 | Journal eISSN: 2084-6118 | Journal ISSN: 0867-6046 (formerly 2084-6118)

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Language: English

Page range: 238 - 245

Submitted on: Jan 25, 2020

Accepted on: May 11, 2021

Published on: Sep 18, 2021

Published by: Faculty of Geography and Regional Studies, University of Warsaw

In partnership with: Paradigm Publishing Services

Keywords:

China,

trade liberalization,

incomplete specialization,

Related subjects:

© 2021 Andrzej Cieślik, Tenzin Tseyang, published by Faculty of Geography and Regional Studies, University of Warsaw
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 25 (2021): Issue 4 (October 2021)