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Outward market integration and the Re-ranking of leading exporters in China

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  • Yu, Zhuangxiong
  • Wang, Tiantian
  • Shi, Xunpeng
  • Han, Jiarong
  • Yang, Yang

Abstract

Amid a profound reconfiguration of the global trading landscape, declining Outward Market Integration (OMI) has substantially impacted exporters' decisions and performance. This study explores the repercussions of reduced OMI on Market Leading Firms Re-ranking (MLFR), a proxy for vertical mobility in the product market. Using Chinese product-level data, we measure OMI via a Domestic-Foreign Cost Ratio (DFCR) at the city-industry level, linking domestic data with OECD input-output tables. Results show that reduced OMI intensifies MLFR, particularly in low-barrier, low-concentration sectors and high-ubiquitous, low-centrality products. Mechanism analysis reveals that reduced OMI compels Market Leading Firms to diversify their operations, shrink export scales, lower product quality, and reduce core product comparative advantage. The heightened MLFR precipitates a contraction in both export value and the number of exporters, while simultaneously fostering an export patter marked by high prices and low quality and with the deterioration in market efficiency. The findings offer policy insights for navigating trade upgrading during the ongoing restructuring of the global trade landscape.

Suggested Citation

  • Yu, Zhuangxiong & Wang, Tiantian & Shi, Xunpeng & Han, Jiarong & Yang, Yang, 2026. "Outward market integration and the Re-ranking of leading exporters in China," Structural Change and Economic Dynamics, Elsevier, vol. 79(C), pages 609-624.
    • Handle: RePEc:eee:streco:v:79:y:2026:i:c:p:609-624
    DOI: 10.1016/j.strueco.2026.06.010
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