Abstract
ABSTRACT This study investigates the impacts of FDI in services on the sophistication of the total export and the domestic added components of manufacturing firms in China, utilizing the policy of FDI access relaxation in services as an exogenous shock. The results show that FDI in services increases the sophistication of firms’ total export, but decreases the sophistication of domestic added components. Increasing the use of imported sophisticated inputs is a potential influencing mechanism of FDI in services.
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