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Keywords

double cycle, internal cycle, enterprise heterogeneity, market selection

Abstract

In the context of the construction of a new pattern of double circulation in China, in order to explore the solution of enterprise integration into the internal cycle, this paper is based on the Melitz heterogeneous enterprise model, combined with the theory of productivity paradox, the core explanatory variables of the model are enriched, from the TFP commonly studied by the academic community to labor productivity and operating profit margin, and the theoretical hypothesis that the above two indicators may have a significant role in promoting the integration of enterprises into the domestic market is proposed. The panel data of enterprises in Zhejiang Province from 2007 to 2013 in the industrial and enterprise database is selected for verification. Studies have shown that: For enterprises with high domestic market preference, labor productivity and operating profit margin have a significant role in promoting integration into the internal cycle; the capital productivity and total return on assets of high-preference enterprises also significantly affect the integration of enterprises into the internal cycle through the intermediary effect; for enterprises with low domestic preferences, labor productivity still significantly affects the integration into the internal cycle, while profitability has no significant impact on market selection, that is, the level of labor productivity is not directly related to market choice. However, the improvement of this indicator helps all kinds of enterprises to integrate into the internal cycle, and the “paradox” still has a certain applicability in China.

DOI

10.16315/j.stm.2022.01.006

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