CEPII, Recherche et Expertise sur l'economie mondiale
Export upgrading and growth: the prerequisite of domestic embeddedness

Sandra Poncet
Felipe Starosta de Waldemar

 Highlights :

 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 for 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 the key for capacity building and technology adoption to be growth enhancing.

 Keywords : Economic complexity | export upgrading | FDI | processing trade | growth | China

 JEL : F10, O11, O14, O40, O53
CEPII Working Paper
N°2012-26, October 2012

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