Using transaction-level data for the Chinese manufacturing sector, this paper provides a comprehensive analysis of the causal effect that firms’ imports have on quality upgrading. We implement an empirical strategy that delivers quality estimates at the firm-product-destination level. Exploiting this measure and accounting for the endogeneity of imported inputs, this paper shows that sourcing from abroad boosts export quality. Moreover, the analysis indicates that quality improvements are particularly strong when firms purchase inputs from high-income countries. Taken together, these results provide direct evidence that quality upgrading is an important mechanism through which imports favor firms’ export performance.
Firms' imports and quality upgrading: evidence from Chinese firms / Zhu, Min; Tomasi, Chiara. - In: WORLD ECONOMY. - ISSN 0378-5920. - 2020, 43:5(2020), pp. 1371-1397. [10.1111/twec.12934]
Firms' imports and quality upgrading: evidence from Chinese firms
Tomasi, ChiaraUltimo
2020-01-01
Abstract
Using transaction-level data for the Chinese manufacturing sector, this paper provides a comprehensive analysis of the causal effect that firms’ imports have on quality upgrading. We implement an empirical strategy that delivers quality estimates at the firm-product-destination level. Exploiting this measure and accounting for the endogeneity of imported inputs, this paper shows that sourcing from abroad boosts export quality. Moreover, the analysis indicates that quality improvements are particularly strong when firms purchase inputs from high-income countries. Taken together, these results provide direct evidence that quality upgrading is an important mechanism through which imports favor firms’ export performance.File | Dimensione | Formato | |
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World Economy - 2020 - Zhu - Firms imports and quality upgrading Evidence from Chinese firms.pdf
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