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Firms' imports and quality upgrading: Evidence from Chinese firms

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  • Min Zhu
  • Chiara Tomasi

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 favour firms' export performance.

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  • Min Zhu & Chiara Tomasi, 2020. "Firms' imports and quality upgrading: Evidence from Chinese firms," The World Economy, Wiley Blackwell, vol. 43(5), pages 1371-1397, May.
  • Handle: RePEc:bla:worlde:v:43:y:2020:i:5:p:1371-1397
    DOI: 10.1111/twec.12934
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    1. Ndubuisi, Gideon & Mensah, Emmanuel & Owusu, Solomon, 2020. "Export Variety and Imported Intermediate Inputs: Industry-Level Evidence from Africa," MPRA Paper 106008, University Library of Munich, Germany.

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