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Export Upgrading and Growth: The Prerequisite of Domestic Embeddedness

Author

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  • Sandra Poncet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Felipe Starosta de Waldemar

    (RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11)

Abstract

Our work contributes to the literature relating output structure and economic development by showing that growth gains from upgrading are not unconditional. Relying on data from a panel of Chinese cities, we show that the level of capabilities available to domestic firms operating in ordinary trade is an important driver of economic growth. However, no direct gains emanate from the complexity of goods produced by either processing-trade activities or foreign firms. This suggests that the sources of product upgrading matter, and that domestic embeddedness is key in order for capacity building and technology adoption to be growth enhancing.

Suggested Citation

  • Sandra Poncet & Felipe Starosta de Waldemar, 2013. "Export Upgrading and Growth: The Prerequisite of Domestic Embeddedness," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01045003, HAL.
    • Handle: RePEc:hal:cesptp:hal-01045003
    DOI: 10.1016/j.worlddev.2013.05.010
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    More about this item

    Keywords

    economic complexity; export upgrading; FDI; processing trade; growth; China;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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