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Liberalization for services FDI and export quality: Evidence from China

Kazunobu Hayakawa (), Hiroshi Mukunoki and Chih-hai Yang

Journal of the Japanese and International Economies, 2020, vol. 55, issue C

Abstract: By employing firm-level export data in China, this paper empirically examines the effect of liberalization of services foreign direct investment (FDI) on exporting firms’ quality upgrading. To evaluate its relative effectiveness, we also examine other kinds of trade policies, including tariffs in export destination countries and input and output tariffs in China. With China's accession to the World Trade Organization in December 2001, these trade policies changed substantially during our sample period of 2000–06. Empirical results showed that easing the restrictiveness of services FDI resulted in raising export product quality, mainly for foreign-owned enterprises. More than any other trade policy, we found that reduced input tariffs contributed to raising export product quality.

Keywords: Tariffs; China; Services (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:55:y:2020:i:c:s0889158319300516

DOI: 10.1016/j.jjie.2019.101060

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