The Effect of Industrial Intermediate Inputs on the Export Diversity of Chinese Enterprises

Abstract

China has put forward the policy direction of domestic market integration in response to the volatile domestic and international political and economic environment. Meanwhile, enterprise export diversification is becoming the research frontier of the new trade theory (NTT). In order to make research on the factors affecting or determining export diversification in the contemporary context, this paper links the trend of domestic market integration with export diversification, and constructs a fixed-effects regression model using the Chinese industrial-enterprise customs matching database from 2000 to 2007 to study the relationship between industrial intermediate inputs and export diversification and the enterprise heterogeneity effects. According to the empirical results, it shows that the increase of intermediate inputs can promote the export diversification. The results of the heterogeneity analysis show that such kind of effect also varies depending on the differences in firm ownership, firm location, firm trade patterns, and capital intensity. In such a case, in order to complete the industrial upgrading of the domestic value chain and upgrade the export industrial structure under the trend of domestic market integration, it is necessary to pay attention to the liberalization of intermediate goods trade and the improvement of relevant policy conditions.