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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.

Suggested Citation

  • Sandra Poncet & Felipe Starosta de Waldemar, 2012. "Export upgrading and growth: the prerequisite of domestic embeddedness," Working Papers 2012-26, CEPII research center.
  • Handle: RePEc:cii:cepidt:2012-26
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    More about this item

    Keywords

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

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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