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Export upgrading and growth: the prerequisite of domestic embeddedness

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  • Sandra Poncet
  • Felipe Starosta de Waldemar

Abstract

Our work contributes to the literature relating output structure and economic development by showing that growth gains from upgrading are not unconditional. Relying on data from a panel of Chinese cities, we show that the level of capabilities available for domestic firms operating in ordinary trade is an important driver of economic growth. However, no direct gains emanate from the complexity of goods produced by either processing-trade activities or foreign firms. This suggests that the sources of product upgrading matter, and that domestic embeddedness is the key for capacity building and technology adoption to be growth enhancing.

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Bibliographic Info

Paper provided by CEPII research center in its series Working Papers with number 2012-26.

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Date of creation: Oct 2012
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Handle: RePEc:cii:cepidt:2012-26

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Keywords: Economic complexity; export upgrading; FDI; processing trade; growth; China;

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