Empirical Analysis of Exports of Service Trade in Jiangsu Province

Abstract. With the development of world economic integration， trade in service has become an active part in international economic activities. As China's economically developed coastal province， Jiangsu's trade in service in recent years has been rapidly developed. The quantity and quality of services trade has been greatly improved， the momentum of growth has been relatively strong， however， especially the exports of trade in service is not high， the product is still relatively simple. Starting from a variety of factors affecting service trade of exports， this article tends to determine the analytical indicators， construct analytical model， and use the Grey Relational Analysis by historical data to determine the most important factor and the degree of influence that affects service trade of exports in Jiangsu. What's more， it raises some policy recommendations by combining with the current situation of Jiangsu.

Keywords： Trade in service， Export， Empirical analysis

1. Introduction

Trade in service is to treat serve as a trade object in international transactions. Under the Uruguay Round negotiations， trade in service is divided into 12 categories of commercial services， which includes communications， construction， finance， transportation services and so on. In the years from 1980 to 2010， the world trade in service grew in an average rate of 7.88% per year， which is higher than the 6.5 % growth in trade in goods. By the end of 2010， the total world trade in service increased from $ 770.2 billion in 1980 to $ 7203.7 billion. Developed countries are in a dominant position in world trade in service， which accounted for 33.1 percent of the world's proportion of the service trade of the United States， Germany， Japan， and the United Kingdom.

In the late 1980s， China's trade in service started， the proportion of China's total service trade in total world trade in service remained stable growth from 1992 to 2010. China's total trade in service in 1992 was $ 18.3 billion， and soared to $ 362.4 billion in 2010， an increase of more than 19 times in just 18 years. The proportion of the world increased from 1% in 1992 to 4.3 % in 2010， which ranked 7th in the world.

2. Literature review

Trade in service is a new way of trading； it gradually evolved from the trade in goods. The history of researching trade in service by economics was not as long as that in goods. Until 1970， the national economists began to focus on service trade. But the research proposition is still at the exploratory stage， the research literature is even fewer. At that time， economists underestimated the role of service sector in economic development， not making the formation of a standardized system of service and trade theory in that period.

3.1.2 Foreign Direct Investment FDI （x2）

Foreign interest in local economic investment is foreign direct investment. To accelerate the pace of China's opening up of service， the services sector to attract foreign investment is also increasing year by year， the use of foreign capital not only to optimize the service structure， raise the level of service industry as a whole， but also large numbers of jobs and help improve our service industry which has the shortage of construction funds. Such effects can determine the impact of service exports in Jiangsu Province by foreign direct investment.

3.1.3 The trade in goods （x3）

China's trade activity is composed of trade in service and trade in goods. After the analysis and appraisal of the domestic and foreign scholars， they also exist between the mutual promotion and mutual interdependence. The merchandise trade growth can stimulate the development of trade in service， this is because the development of trade in goods can drive development of related services sector such as transportation， insurance， telecommunications and finance， and the services can provide required supporting soft environment for the development of trade in goods. It is clear that trade in goods has deep impact on trade in service exports； therefore， this paper selects volume of trade in goods as analysis indicators.

3.1.4 Financial for spending on technology （x4）

The government also has varying degrees of impact on trade in service exports. Every year， government departments invest a lot of money in scientific research and development， technology and knowledge-intensive industries in international trade are dominating， and their competitiveness are all derived from the efficiency， technological innovation and investment on technology. However， due to efficiency and innovation are difficult to measure accurately， this paper will use financial spending on technology to stand for the degree of government's emphasis on trade in service exports.

Government's annual investment in the science and technology can be divided into many forms. For the consistency of the data in the sample interval， this paper adopts the research and experimental development expenditures （R&D） as the analysis indicators since it can reflect the capability of independent innovation of a country or region.

3.1.5 Services sector openness （x5）

The service sector openness refers to the proportion of service trade import and export volume in the gross domestic product （GDP）. The International Monetary Fund （IMF） puts forward the calculation formula of the service sector openness：