Abstract

With the fast development of China's economy, especially with the background of economic structure adjustment, the internal structure has developed constantly as well. The development of internal structure demands more requirements. From the macro perspective, in September 2013, President Xi Jinping proposed“The Belt and Road”, covering more than 60 countries and 4 billion populations with the aim to boost trade between China and countries around. The Five Coordination, including policy, infrastructure, trade, financial and people-to-people connectivity, is the key points. Domestically, “The Belt and Road”covers 11 provinces and multiple cities from east, west, south and north regions. It has different influences for different regions.

From the meso perspective, domestic regional economy has the issue of unbalanced development. The export firms are mostly in the eastern regions. At the beginning of Reform and Opening-up, the policy for encouraging export activity is mainly levied in the eastern costal area. For example, in 1979, China's government issues the policy to establish special economic zones with the orientation for exporting in order to attract foreign direct investment and aid the development of the economy. In the middle and western area, due to the remote location away from costal area, there is somehow geographic disadvantage, there are some constrains to explore international market and develop local economy.

From the micro perspective, under current economic situation, the study of city's internal structure becomes one of the important themes. The spatial changes of cities drive the reactions of firms, population, traffic, export etc. The economic activity of export firms inside cities is one significant field. The internal location of firms in cities has impact on its export performance.

Based on the spatial background of micro, meso, and macro perspectives, this dissertation claims the research question as:how does the internal geography impact firm's export performance? We segment the core question into two testable questions. Firstly, what is the mechanism of internal geography's impact on the export destination choice between neighboring and remote country? Secondly, what is the mechanism of internal geography's impact on the export intensity for firms exporting to neighboring and remote country？

In terms of the data, the dissertation integrates China's Custom Import and Export Data, China's Industrial Firms Data and CEPII from 2000 to 2007. We use the address of firms to locate the coordinates and determine the geographic location for manufacturing firms. Through the data organizing and cleaning, we get the ground data for internal geography.

The logic of this book is based on the following two levels. Firstly, we divide the core research question into two segmenting questions. We study the nexus of internal geography and firm's export performance. Moreover, the effect of firm's internal geography on the choice between exporting to remote country and neighboring country. The effect of internal geography on the export intensity to remote country or neighboring country.

Based on H-O-von Thunnen model and Redding-Venables model, we extend a simple model for solving our core issue of the dissertation. More precisely, we summarize the existing literature based on the theoretical and empirical issues. Then we sum-marize the marginal contribution of the research. Based on the logic mentioned above, the dissertation is organized as follows：

Chapter 1 describes the research background and core issue. Chapter 1 introduces the research background from macro, meso, micro perspectives. From macro perspective, “The Belt and Road”requires the research for domestic geographic location. From meso perspective, the unbalanced regional development in China requires solutions to improving the situation. From micro perspective, the completely usage of inter-nal space for cities requires new research. Based on the background above, we argue the research question is:how to solve the issue of internal geographic spatial location for manufacturing firms? From the micro perspective, how do manufacturing firms and export firms locate within the cities? From the macro perspective, what is the impact of internal geography on the export performance for manufacturing firms？

Chapter 2 summarizes the existing literature. This chapter summarizes classical models in the field of economic geography. In the following, this chapter introduces urban space literature relating to internal geography and international trade. We system-atically organize the literature and provide powerful support for the incoming chapters.

Chapter 3 describes the typical facts of China's industrial economy. This chapter introduces the development of China's economy in different regions from the perspectives of history of spatial development, the industrial distribution and output, export performance and infrastructure. This chapter use figures to present the typical facts of China's industrial economy. Besides, the industrial distribution under different geo-graphic situation is illustrated.

Chapter 4 studies the theory of internal geography and export performance of firms. In this chapter we firstly analyse the theoretical background of internal geography and international trade. The extended model is based on two basic models, including Venables-Limao（2002）and Redding-Venables（2003）. We firstly introduce these two existing models, then we extend the two models and get the model we need for this dissertation. After extending the model, we compare the extended model with existing models to find the differences of them. As following, we summarize different features of firms in different regions for exporting to neighboring and remote countries.

Chapter 5 studies the impact of internal geography on the choice of export destinations empirically. Based on the theoretical prediction in Chapter 4, we establish the empirical model. We use Logit model and find out that inland firms prefer to export to remote countries. Firms locating at the suburb of the cities prefer to export to remote countries. Railway is the significant method for firms to export to remote countries. TFP is not significant for firms to choose whether to export to neighboring country or remote country.

Chapter 6 studies the impact of internal geography on the export intensity. Export intensity is one of the most important representatives for export performance. This chapter is very important extension of Chapter 5. Based on the theoretical prediction in Chapter 4, we use GLM and find out firms farther away from sea port, the export intensity is greater. However, distance from firm location to sea port is not statistically significant for exporting to neighboring countries. Export intensity is greater for exporting to high income countries than low income countries. The export intensity of firms locating at the suburb of cities is lower than the firms locating at the center. From the perspective of external geography, the regional effects of destination countries play different roles on Chinese firms'export intensity. Asia and Africa have positive effects on Chinese firms' export intensity. However, Europe, North America and Oceania play negative effect on Chinese firms' export intensity due to the fierce competition. Pure exporters strongly reply on the internal geography and locate nearby the sea port.

Chapter 7 summarizes the main findings and conclusions of the dissertation. This chapter summarizes all the relevant conclusions and provides policy implications for the main conclusion. Meanwhile, this chapter also discusses the limitations of the dissertation and possible extension for future research.

The main contribution of the dissertation is:based on the theories by Venables & Limao（2002）and Redding & Venables（2003）, this dissertation extends a simple theoretical model to evaluate the mechanism of the impact of internal and external geography on firm's export performance. The dissertation proves the mechanism of internal and external geography on export performance. The internal geography has impact on firm's export performance. It studies the relation between internal geography and export performance.

Then this dissertation provides a firmcountry pair research method. The empirical research is based on the firm-country pair data. Through this way, we are a-ble to combine the internal geography with export destinations features. In empirical studies, it can control the destinations features.

Finally, we provide a possible path for developing lagging area and support“The Belt and Road”policy.

Our main findings are:firms nearby sea port prefer to export to neighboring countries. Firms far away from sea port prefer to export to remote countries. The export intensity is greater if the exporting firms are distant to the sea port. However, the distance to the sea port is not statistically significant if the firms export to neighboring countries. Railway transport is significant for firms to export to remote countries.

We address that there is existence for some inland firms to export to neighboring countries. This is because the product is between complete factor intensity and complete transport intensity. In this way, some inland firms export to neighboring countries. However, this does not disobey our conclusion. We do not deny the existence of products between complete factor intensity and complete transport intensity. We just use a mechanism to prove and explain a group of firms' export performance.

Key Words:Internal geography; distance to sea port; destination choice; rail-way transport; export intensity; regional effect