Digital intermediate product imports and firms’export quality: evidence from China

Abstract

AbstractBased on the ‘Statistical Classification of Digital Economy and Its Core Industries (2021)’ published by the National Bureau of Statistics of China, this paper proposes a more accurate method to identify digital intermediate products by matching China Industrial Classification code with Harmonized System code, and investigates the connection between digital intermediate product imports and firms’ export quality using China’s firm-level data from 2000 to 2013. Our estimations show that digital intermediate product imports can significantly promote the quality of firms’ export products through both the productivity channel and the quality production capacity channel, and the conclusion still holds after a series of endogeneity tests and robustness tests. Moreover, considering the heterogeneity effect of digital intermediate product imports with different characteristics, we find that high-quality and diversified digital intermediate product imports will strengthen the quality upgrading effect of firms’ export products, while the effect of improving the technical content is not significant. This paper provides a new path for firms, especially those in developing countries, to upgrade export quality.