Wu Jiawei | Shock of External Demand, Trade Sales Strategies, and Domestic and International Economi

December 8-9, 2023，Initiated by the Center for International Finance and Economics Research (CIFER) of Tsinghua University's PBC School of Finance, hosted by Liaoning University, and co-organized by the Center for International Finance and Economics Research (CIFER) and the School of Finance and Trade of Liaoning University, this event..."2023 International Trade Disputes and Globalization Restructuring Academic Symposium"The meeting was successfully held.

Tsinghua University doctoral studentWu JiaweiAttendees included Assistant Researcher and CIFER Researcher from the Academy of International Trade and Economic Cooperation, Ministry of Commerce.Wang XiaoyanHostSub-forum Fourteen: Trade Policy (Part Two)，shareIts collaborators titledExternal Demand Shocks, Trade and Sales Strategies, and Domestic and International Economic Cycles: An Examination Based on Enterprises' Domestic and International Sales RelationshipsThe article.

Wu Jiawei, PhD candidate in the Department of Economics, School of Economics and Management, Tsinghua UniversityResearch areas include international trade and economic cycles.

Wu Jiawei

In sharing her article, Wu Jiawei stated that how enterprises balance foreign trade and domestic sales in the face of complex fluctuations in international demand is crucial for the stable and sustainable development of China's foreign trade enterprises. This article examines how Chinese enterprises can strategically adjust their export trade and domestic sales when faced with exogenous demand shocks. Specifically, we used the global financial crisis as an example of an external demand shock to examine the domestic sales and export behavior of Chinese enterprises. The results show that after encountering an external demand shock, enterprises' domestic and foreign trade sales exhibit a "boomerang" effect: every 100 yuan decrease in exports leads to an increase of 18.15 yuan in domestic sales, thus the domestic market becomes an important buffer for enterprises. However, in the long term, exports and domestic sales show a "synergistic growth" effect, that is, a significant trend of simultaneous increase, with every 100 yuan increase in exports leading to a 60.3 yuan increase in domestic sales. Further in-depth analysis of the results reveals that newly entered enterprises explained nearly 30% (31.31%) of the total export growth after the crisis (i.e., between 2009 and 2013), thus the dynamic changes in domestic and foreign sales strategies have triggered a reallocation of resources. To overcome the problem of causal identification, this paper constructs the degree of external demand dependence of enterprises as an instrumental variable, and the results remain robust. This research provides important theoretical and empirical evidence for how Chinese enterprises can actively adjust their trade and sales strategies and achieve a new development pattern of "mutual promotion of domestic and international dual circulation."

Tang Junjie

Tang Junjie, Research Fellow at the Chinese University of Hong KongThis article provides a professional perspective and offers practical suggestions and further possibilities for future improvement.