Product Quality Measurement, Dynamic Changes, and the Belt and Road Initiative Distribution Characteristics: Evidence from Chinese Wooden Furniture Exports

Abstract

As the most important forest product in the export of China, wooden furniture is facing increasingly fierce international competition and has a strong need for quality improvement. Based on the endogenous determination model of quality, this paper measures the quality of Chinese wooden furniture in exports from 1998 to 2017, by using product-level trade data of BACI CEPII. From the perspectives of the overall and sub-category quality, it examines the characteristics of dynamic changes in the product quality and its regional distribution of “the Belt and Road Initiative” countries. The results show that the quality of Chinese wooden furniture in exports is lower than that of wood-based panels and paper products. It remains stable after a slight increase from 2001 to 2005, but the quality level is always low. Among the sub-categories, wooden furniture not for kitchens, offices, or bedrooms has the lowest quality, while wooden office furniture has the highest one. The three dominant sub-categories that account for a high export share are all low in quality, while the small proportion sub-categories are all of higher quality, implying a strong imbalance. In particular, the quality of the main export products, upholstered wooden seats and wooden furniture not for kitchen, office, or bedroom use, has continued to decline, highlighting the plight of the quality growth of Chinese wooden furniture. For the BRI markets, the quality of Chinese wooden furniture exported to the region has declined slightly since 2012. However, different markets have shown different characteristics in the quality level and the direction of change. In terms of quality level, the qualities of wooden furniture exported to Malaysia, Israel, the United Arab Emirates, Vietnam, and the Philippines are relatively high. In terms of changing trends, the qualities of wooden furniture to Malaysia, Thailand, Indonesia, and Israel are showing a rising trend. In this case, accurately identifying the quality of different export categories of furniture products and their changing characteristics can help furniture enterprises make better production and operation decisions, promote the formation of a good business environment, and foster new comparative advantages and international competitiveness.