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Export sophistication and economic growth: Evidence from China

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  • Jarreau, Joachim
  • Poncet, Sandra

Abstract

We consider the effect of export sophistication on economic performance by appealing to regional variation within one single country (China) over the 1997–2009 period. We find evidence in support of Hausmann, Hwang and Rodrik (2007), in that regions specializing in more sophisticated goods subsequently grow faster. We find substantial variation in export sophistication at the province and prefecture level, controlling for the level of development, and that this sophistication in turn drives growth. Our results suggest that these gains are limited to the ordinary export activities undertaken by domestic firms: no direct gains result from either processing trade activities or foreign firms, even though these are the main contributors to the global upgrading of China's exports. As such, the extent of assembly trade and foreign entities should be distinguished in order to measure the true movement in a country's technology and the contribution of exports to economic growth.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 97 (2012)
Issue (Month): 2 ()
Pages: 281-292

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Handle: RePEc:eee:deveco:v:97:y:2012:i:2:p:281-292

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

Related research

Keywords: Export sophistication; Economic growth; Processing trade; China;

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References

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Citations

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Cited by:
  1. Mayneris, Florian & Poncet, Sandra, 2013. "Chinese firms'entry to export markets : the role of foreign export spillovers," Policy Research Working Paper Series 6398, The World Bank.
  2. 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.
  3. Sandra PONCET & Felipe STAROSTA DE WALDEMAR, 2012. "Product relatedness and firm exports in China," Working Papers P58, FERDI.
  4. Sandra Poncet & Felipe Starosta de Waldemar, 2012. "Export upgrading and growth: the prerequisite of domestic embeddedness," Working Papers 2012-26, CEPII research center.
  5. THORBECKE, Willem & Hao-Kai PAI, 2013. "The Sophistication of East Asian Exports," Discussion papers 13092, Research Institute of Economy, Trade and Industry (RIETI).
  6. Françoise Lemoine & Deniz Ünal, 2012. "Scanning the Ups and Downs of China’s Trade Imbalances," Working Papers 2012-14, CEPII research center.
  7. Felix Groba & Barbara Breitschopf, 2013. "Impact of Renewable Energy Policy and Use on Innovation: A Literature Review," Discussion Papers of DIW Berlin 1318, DIW Berlin, German Institute for Economic Research.
  8. Fernandes, Ana M. & Paunov, Caroline, 2012. "The risks of innovation : are innovating firms less likely to die ?," Policy Research Working Paper Series 6103, The World Bank.
  9. Poncet, Sandra & de Waldemar, Felipe Starosta, 2013. "Product relatedness and firm exports in China," Policy Research Working Paper Series 6676, The World Bank.

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