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Trade liberalization and digital servitization: A study based on microdata from chinese manufacturing firms

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  • Ji, Jie

Abstract

In the era of global digital transformation, trade openness is vital for advancing digital servitization. This study employs microdata from China to investigate the effects of trade liberalization on the digital servitization of manufacturing firms. The findings are as follows: (1) The baseline results show that reducing trade barriers can enhance firms' digital servitization level. (2) Mechanism analysis reveals that trade liberalization promotes digital servitization by increasing digital service sales and decreasing other business sales, fostering product diversification and improving profits without leading to the "service paradox". (3) Heterogeneity analysis indicates that capital-intensive and technology-intensive firms are more likely to engage in digital servitization as a result of trade liberalization. (4) Further analysis shows that the combination of border and behind-the-border measures can further facilitate digital servitization. This study offers theoretical support for manufacturing firms aiming to implement digital servitization strategies in an open environment.

Suggested Citation

  • Ji, Jie, 2025. "Trade liberalization and digital servitization: A study based on microdata from chinese manufacturing firms," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 654-675.
    • Handle: RePEc:eee:streco:v:75:y:2025:i:c:p:654-675
    DOI: 10.1016/j.strueco.2025.10.001
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