Expanding Export Variety: The Role of Institutional Reforms in Developing Countries

Arbeitspapier

This paper presents theory and evidence showing that institutional reforms in developing countries can effectively expand their product varieties in export. Our model demonstrates that relaxing foreign ownership controls and improving contract enforcement can induce multinational companies to produce new products in host developing countries, and that a combination of the two reforms has an amplifying effect on the introduction of product varieties. Consistent with these theoretical predictions, we find empirically that ownership liberalization and judicial quality played an important role in raising the extensive margin of processing exports in China for the period of 1997-2007.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7611

Classification and Topics

• Classification: Wirtschaft ; Organizational Behavior; Transaction Costs; Property Rights ; Empirical Studies of Trade ; Firm Organization and Market Structure
• Subject: export variety ; ownership structure ; contract environment ; processing trade ; policy reform ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sheng, Liugang ; Yang, Dennis Tao
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/89881
• Last update: 10.03.2025, 11:41 AM CET