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Export sophistication and economic growth: evidence from China

Listed author(s):
  • Joachim Jarreau

    (PSE - Paris School of Economics, CRPMS EA 3522 - Centre de Recherches Psychanalyse, Médecine et Société - UPD7 - Université Paris Diderot - Paris 7)

  • Sandra Poncet

    ()

    (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

We consider the effect of export sophistication on economic performance using regional variations within a single country (China) over the period 1997-2009. We confirm Hausmann, Hwang and Rodrik (2007)'s prediction that regions that specialize in more sophisticated goods subsequently grow faster. We find that at the province and prefecture level, there is substantial variation in export sophistication controlling for the level of development, and that this difference in turn matters for growth. Our results suggest that these gains are limited to ordinary export activities undertaken by domestic firms. No direct gains appear to derive from processing trade activities and from foreign firms even though they are the main contributors to the global upgrading of China's exports. This finding suggests that the contribution of assembly trade and foreign entities must be distinguished when one wants to measure the true improvement in the country's technology level and its contribution to economic growth.

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Paper provided by HAL in its series PSE - G-MOND WORKING PAPERS with number halshs-00962593.

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Date of creation: Jan 2011
Handle: RePEc:hal:gmonwp:halshs-00962593
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