Export Sophistication and Economic Performance: Evidence from Chinese Provinces

Joachim Jarreau and Sandra Poncet ()

Working Papers from CEPII research center

Abstract: We consider the effect of export sophistication on economic performance using regional variations within a single country (China) over the period 1997-2007. We confirm Hausmann, Hwang and Rodrik (2007)’s prediction that regions that engage in the cost discovery process of developing sophisticated goods grasp greater gains from globalization and grow faster. We find that these gains are limited to to export activities undertaken by domestic entities. Direct gains do not appear to derive from foreign entities typically engaged in processing trade even though they are the main contributors to the global upgrading of China’s exports. Our findings globally suggest that the expected gains from exporting higher productivity goods are not unconditional, they are greater for provinces already blessed by high incomes, better market centrality and higher trade performance and Foreign Direct Investment attractiveness. These features consistent with evidence of increasing returns to sophistication are unfortunately likely to contribute further to the current widening of spatial economic disparities across China.

Keywords: EXPORT SOPHISTICATION; ECONOMIC GROWTH; OUTWARD ORIENTATION; CHINA (search for similar items in EconPapers)
JEL-codes: F1 O1 R1 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2009-34

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