Services Liberalization and Export Diversity: Theory and Evidence from Chinese Firms

Zhuoran Bai, Shuang Meng, Zhuang Miao and Yan Zhang

MPRA Paper from University Library of Munich, Germany

Abstract: During the last decades, we observe a liberalization trend in the services sector globally. Using the Chinese exporting firm data, this paper studies how multi-product firms adjust their export strategies in response to the services trade liberalization across export destination countries. Our study finds a highly significant positive relation between the services trade liberalization in the destination countries and each firm's export diversify, which is measured as the product scope, the Herfindahl-Hirschman style index, or the value skewness across varieties,export product switch. Our empirical analysis further finds that firms increase the relatedness of their exporting varieties towards the OECD countries, but reduce it towards the non-OECD countries. With a conventional multi-product firm model, we explore the mechanisms behind all our empirical findings.

Keywords: Services trade Liberalization; Export Diversity; Chinese Data (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2019-08-01
New Economics Papers: this item is included in nep-int, nep-tid and nep-tra
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Working Paper: Services Liberalization and Export Diversity: Theory and Evidence from Chinese Firms (2019)
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