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Corresponding Author:
Kevin Zhang, Department of Economics, Illinois State University, Illinois, USA

FDI, Export Sophistications, and Export Upgrading in Emerging Economies: Evidence from Chinese Manufacturings

Volume 70 - Issue 2, May 2017
(pp. 245-260)
JEL classification: F21, F23, O14, O53
Keywords: Foreign Direct Investment (FDI), Export Sophistications (XS), Export Upgrading (XU), Manufactured Exports (MX)

Abstract

Export upgrading, reflecting improved export sophistication or technological capabilities over time, can bring a nation larger benefits from international trade. How does foreign direct investment (FDI) affect export sophistication and export upgrading in emerging economies?  While the topic is important and timing, studies on the issue in the literature have been limited. This paper attempts to close the gap by using the Chinese manufacturing panel data in 2005-2013. Estimates suggest that FDI indeed has strong sophistication- and upgrading-enhancing effects on China’s manufactured exports; and such gains from FDI depend largely on China’s absorptive capacity measured by human capital. 


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)
www.ge.camcom.gov.it