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Export upgrading and growth in China: the prerequisite of domestic embeddedness

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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, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, 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)

  • Felipe Starosta

    (UP1 - Université Paris 1 Panthéon-Sorbonne)

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 _rms 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 _rms. 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, 2013. "Export upgrading and growth in China: the prerequisite of domestic embeddedness," PSE - G-MOND WORKING PAPERS halshs-00960684, HAL.
    • Handle: RePEc:hal:gmonwp:halshs-00960684
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00960684
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    Keywords

    Economic complexity; Export upgrading; FDI; Processing trade; Growth; China;
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