Digital product import and domestic value-added ratio of export: Theory and demonstration

Abstract

Based on the matching of the database of China Industry Business Performance and China Customs Trade from 2000 to 2013, this paper constructs the digital product import index, and adopts the method of panel data modeling to systematically investigate the impact and mechanism of digital product import on the domestic value-added rate of Chinese enterprises' export from the theoretical and empirical aspects. The research finds that the import of digital products significantly promotes the improvement of the domestic value-added rate of enterprises' export, and the core conclusion is still valid after considering the endogeneity of variables, changing the measurement index and estimation method. The mechanism test finds that the import of digital products improves the domestic value-added rate of enterprises' export through two channels: cost markup and relative price. In addition, the heterogeneity test finds that the import of digital products has a stronger effect on the improvement of the domestic value-added rate of enterprises' export in non-export enterprises, pure general trading enterprises, foreign-funded enterprises, labor-intensive enterprises and enterprises in the eastern region.