Liberalization for services FDI and export quality: Evidence from China |
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| Affiliation: | 1. Development Studies Center, Institute of Developing Economies, Japan;2. ISEAS-Yusof Ishak Institute, Singapore;3. Department of Economics, Gakushuin University, Japan;4. Department of Economics, National Central University, Taiwan;1. School of Business, Shandong University of Technology, No.88 Gongqingtuan Road, Zibo, Shandong 255012, China;2. Department of Economics, University of Western Ontario, London, Ontario N6A 5C2, Canada;3. NBER, United States;4. The Centre for International Governance Innovation (CIGI), Canada;1. Universidad Complutense de Madrid, Spain;2. ETH Zurich, Switzerland;3. Xiangtan University, China;1. 2424 Maile Way, Saunders Hall 542, University of Hawai‘i, Honolulu, HI 96822, USA;2. Keio University, University of Hawai‘i, and RIETI, 2424 Maile Way, Saunders Hall 542, University of Hawai‘i, Honolulu, HI 96822, USA |
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| Abstract: | By employing firm-level export data in China, this paper empirically examines the effect of liberalization of services foreign direct investment (FDI) on exporting firms’ quality upgrading. To evaluate its relative effectiveness, we also examine other kinds of trade policies, including tariffs in export destination countries and input and output tariffs in China. With China's accession to the World Trade Organization in December 2001, these trade policies changed substantially during our sample period of 2000–06. Empirical results showed that easing the restrictiveness of services FDI resulted in raising export product quality, mainly for foreign-owned enterprises. More than any other trade policy, we found that reduced input tariffs contributed to raising export product quality. |
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