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Liberalization for services FDI and export quality: Evidence from China

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  • Hayakawa, Kazunobu
  • Mukunoki, Hiroshi
  • Yang, Chih-hai

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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  • Hayakawa, Kazunobu & Mukunoki, Hiroshi & Yang, Chih-hai, 2020. "Liberalization for services FDI and export quality: Evidence from China," Journal of the Japanese and International Economies, Elsevier, vol. 55(C).
    • Handle: RePEc:eee:jjieco:v:55:y:2020:i:c:s0889158319300516
    DOI: 10.1016/j.jjie.2019.101060
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    5. Murshed, Muntasir & Dao, Nhung Thi Tuyet, 2020. "Revisiting the EKC hypothesis in South Asia: The role of Export Quality Improvement," MPRA Paper 111620, University Library of Munich, Germany, revised 2020.

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