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Does Trade Related Sectoral Infrastructure Make Chinese Exports More Sophisticated and Diversified?

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  • Faheem Ur Rehman

    (Laboratory of International and Regional Economics, Graduate School of Economics and Management, Ural Federal University, 620075 Yekaterinburg, Russia
    Department of Economics, The University of Haripur, Haripur 22620, Pakistan)

  • Ejaz Ahmad

    (Department of Economics, Kohat University of Science and Technology, Kohat 26000, Pakistan)

  • Muhammad Asif Khan

    (Department of Commerce, Faculty of Management Sciences, University of Kotli, Kotli 11100, Pakistan)

  • József Popp

    (Institute of Economic Sciences, Hungarian University of Agriculture and Life Sciences, 2100 Gödöllő, Hungary
    College of Business and Economics, University of Johannesburg, Johannesburg 2006, South Africa)

  • Judit Oláh

    (College of Business and Economics, University of Johannesburg, Johannesburg 2006, South Africa
    Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary)

Abstract

Whether better infrastructure influences Chinese export sophistication (ES) and diversification (ED) is an important question, which surprisingly remains unaddressed. The current study contributes to the ES and ED literature by capturing the symmetric and asymmetric effect of infrastructure on ES and ED. We employ a robust dynamically simulated autoregressive distributed lag (DYS-ARDL) dynamic method, which is an extended version of NARDL and ARDL. The major aim of this new DYS-ARDL dynamic approach was to abolish the issue in orthodox ARDL model approach while examining the long-run and short-run. The new dynamic DYS-ARDL model is accomplished in estimating, stimulating, and robotically plotting predictions of counterfactual alterations in one explanatory variable and its impact on the dependent variable while holding the remaining regressors constant. Furthermore, this new method of DYS-ARDL model can estimate, stimulate, and plot to forecast graphs of positive and negative variations in the variables robotically as well as their short and long-run associations. Interestingly, the results of this study witness the presence of long-run relationship between infrastructure and ES and ED in China. The present study shows that better infrastructure will be more beneficial for Chinese ED and ES.

Suggested Citation

  • Faheem Ur Rehman & Ejaz Ahmad & Muhammad Asif Khan & József Popp & Judit Oláh, 2021. "Does Trade Related Sectoral Infrastructure Make Chinese Exports More Sophisticated and Diversified?," Sustainability, MDPI, Open Access Journal, vol. 13(10), pages 1-21, May.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:10:p:5408-:d:553090
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