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Trade Liberalization, Quality-based Competittion, and Export Growth - Shan Wan

Date & Time:
October 7, 2015 | 3:00 pm - 4:30 pm
SS 423
Shan Wan


Competition, which spurs firms to take innovations and improve their efficiency, gets more intense as the number of the firms increases and when products become more similar. This paper constructs two quality-based competition indices (QBCI) to describe these two phenomena at firm-product level. Then QBCI and import tariff are employed to study the effects of domestic competition and import competition respectively on a firm’s export growth in China. The results show that import competition might not have statistically significant export promotion effects while domestic competition generates important effects on export growth in terms of both the magnitude and statistic significance. This paper suggests that developing countries work more on catalyzing domestic competition before they embrace trade liberalization as a vehicle for competition-induced export promotion.

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