The “International Trade Research Trend” section aims to release the latest research findings in the field of international trade published in authoritative Chinese journals such as “Social Sciences in China,” “Economic Research Journal,” “Journal of Management World,” “China Economic Quarterly,” and “The Journal of World Economy.” It strives to provide everyone with timely, accurate, and high-quality front-line dynamics in the field of international trade.

Social Sciences in ChinaTrade, Power and Welfare: An International Economic Political

Zhang Yuyan and Xia Guangtao

Abstract: The conventional paradigms of trade theories manifest a notable inadequacy by omitting the consideration of power as a means to sustain and enhance relative strength in the realm of intemational interactions among nations. Particularly,in the milieu of great power rivalry, the significance of power in trade relations between advanced and developing nations becomes more pronounced. Against this backdrop,this paper endeavors to fommulate a tractable and gencraliped intemational economic political framework for analyzing strategic interactions among great powers. This framework integrates the power element into the traditional two-country trade theory.concurrently addressing absolute welfare as the central focus of economics and relative welfare as the primary concern of politics -both being dual objectives of nations.Utilizing game theory methods, the analysis reveals thati, in a two-country game, the developing country tends to favor strategies enhancing its intrinsic strengths while mitigating its limitations, whereas the advanced country gravitates towards strategies aimed at exploiting the opponent's vulnerabilities while leveraging its intrinsic strengths.As the techmological gap detemmining comparative advantage narrows,the advancod country inclines towards asserting dominance or even contemplating decoupling from the developing country.

Key Words: great power rivalry, trade, power, welfare, bimodal eficienc

Journal of Management World

Reform of VAT Credit Refund, Financing Constraints and Industrial Chain Linkage

Zhang Tongbin and Liu Wenlong

Abstract: The comprehensive implementation of large-scale Value-Added Tax (VAT) credit refund plays a significant role in bolstering market confidence, stimulating investment vitality, and enhancing the resilience and security of enterprises′ industrial and supply chains. In this paper, under the background of the reform of large-scale VAT credit refund, we study the impacts of VAT credit refund reform on the expansion of enterprises′ industrial chain by using the difference-in-difference method as well as the data of VAT invoices purchased and sold by enterprises. The conclusion is that the reform of VAT credit refund can significantly enhance the backward and forward industrial chain linkages of enterprises, significantly promoting the expansion of enterprise′s industrial chain. The mechanism test shows that the reform of VAT credit refund can enhance the vertical linkage of the industrial chain by easing the financing constraints and promoting the investment of enterprises. It is conducive to promote the integrated development of upper, middle and downstream enterprises. The results of heterogeneity analysis indicate that the industrial chain linkage promotion effects of the VAT credit refund reform are more prominent for large-scale enterprises, non-state-owned enterprises, enterprises with high tax burden and manufacturing enterprises. This paper can not only expand the research on the industrial development effects of "tax and fee reductions" from the perspective of coordinated development of fiscal and industrial policies, but also provide important empirical evidence for further optimizing the VAT system and better deepening the supply-side structural reform.

Keywords: tax and fee reduction; VAT credit refund; financing constraints; industrial chain linkage

JEL Classification: H25, H32, L14

The Journal of World Economy
Urban Value Chain Functional Division of Labour and Firm Innovation: Evidence from Corporate Patents

Chen Xu; Ji Zhanpeng; Xing Xiaobing

Abstract: This paper assesses the urban functional division of labour in various regions by identifying the primary functions of micro-firms in Chinese cities, and then examines the impact and mechanism of the urban functional division of labour on firm innovation based on patent data. The study finds that the urban functional division of labour can significantly promote corporate innovation. The underlying mechanism is that the urban functional division of labour can enhance the integrity and synergy of the industrial chain within the region, increase the stability of corporate supply chains, and expand corporate trade networks. The urban functional division of labour also facilitates the transcendence of business knowledge across administrative boundaries, spilling it over a wider geographical range. The impact of the urban functional division of labour on corporate innovation may also vary due to differences in intercity distance, industry attributes and corporate business coverage. With the improvement in market accessibility and the prominence of central cities, the role of the urban functional division of labour in promoting corporate innovation tends to strengthen. This paper provides guidance for China to cultivate new drivers of corporate innovation by building a regional economic design with complementary advantages.

Key words: urban functional division of labour, corporate innovation, industry chain and supply chain, knowledge spillovers

JEL codes: D00, R00