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The sophistication of exports: Is China special?

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  • Xu, Bin
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    Abstract

    Recent studies have found that China is "special" in exporting highly sophisticated goods not comparable with its income level. In this paper we identify two measurement biases that account for this "China is special" observation. First, product quality has not been fully considered in the measurement of sophistication, which has caused an overestimation of the sophistication of China's exports. Second, the average income of China has been used to measure the export capability of China, which has caused an underestimation of China's capability of exporting sophisticated goods. After correcting the two measurement biases, China appears much less as an outlier in the cross-country comparison of the sophistication of exports.

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    Bibliographic Info

    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 21 (2010)
    Issue (Month): 3 (September)
    Pages: 482-493

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    Handle: RePEc:eee:chieco:v:21:y:2010:i:3:p:482-493

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    Web page: http://www.elsevier.com/locate/chieco

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    Keywords: China Export structure Product quality Sophistication;

    References

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    1. Ari Van Assche & Byron Gangnes, 2007. "Electronics Production Upgrading: Is China Exceptional?," CIRANO Working Papers 2007s-16, CIRANO.
    2. Mary Amiti & Caroline Freund, 2010. "The Anatomy of China's Export Growth," NBER Chapters, in: China's Growing Role in World Trade, pages 35-56 National Bureau of Economic Research, Inc.
    3. Peter K. Schott, 2006. "The Relative Sophistication of Chinese Exports," NBER Working Papers 12173, National Bureau of Economic Research, Inc.
    4. Finger, J M & Kreinin, M E, 1979. "A Measure of 'Export Similarity' and Its Possible Uses," Economic Journal, Royal Economic Society, vol. 89(356), pages 905-12, December.
    5. Zhi Wang & Shang-Jin Wei, 2010. "What Accounts for the Rising Sophistication of China's Exports?," NBER Chapters, in: China's Growing Role in World Trade, pages 63-104 National Bureau of Economic Research, Inc.
    6. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    7. XU, Bin & LU, Jiangyong, 2009. "Foreign direct investment, processing trade, and the sophistication of China's exports," China Economic Review, Elsevier, vol. 20(3), pages 425-439, September.
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    Cited by:
    1. Catherine Yap Co & Ralitza Dimova, 2014. "Preferential Market Access into the Chinese Market: How Good is it for Africa?," Brooks World Poverty Institute Working Paper Series 19614, BWPI, The University of Manchester.
    2. Joachim Jarreau & Sandra Poncet, 2011. "Export sophistication and economic growth: evidence from China," PSE - G-MOND WORKING PAPERS halshs-00962593, HAL.
    3. Gnidchenko, A., 2014. "Improving the Methods for Estimating the Structure and the Basis of Export Potential through Export Diversification," Journal of the New Economic Association, New Economic Association, vol. 21(1), pages 83-109.
    4. Sun, Sizhong, 2012. "The role of FDI in domestic exporting: Evidence from China," Journal of Asian Economics, Elsevier, vol. 23(4), pages 434-441.
    5. Jarreau, Joachim & Poncet, Sandra, 2012. "Export sophistication and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 97(2), pages 281-292.
    6. Zhu, Shujin & Fu, Xiaolan, 2013. "Drivers of Export Upgrading," World Development, Elsevier, vol. 51(C), pages 221-233.
    7. Jaejoon Woo, 2012. "Technological Upgrading in China and India: What Do We Know?," OECD Development Centre Working Papers 308, OECD Publishing.
    8. Yue Gao & John Whalley & Yonglei Ren, 2013. "Decomposing China's Export Growth into Extensive Margin, Export Quality and Quantity Effects," CESifo Working Paper Series 4251, CESifo Group Munich.
    9. Pula, Gabor & Santabárbara, Daniel, 2011. "Is China climbing up the quality ladder? Estimating cross country differences in product quality using Eurostat's COMEXT trade database," Working Paper Series 1310, European Central Bank.
    10. repec:hal:cesptp:halshs-00962593 is not listed on IDEAS

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