Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89881
Authors: 
Sheng, Liugang
Yang, Dennis Tao
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7611
Abstract: 
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.
Subjects: 
export variety
ownership structure
contract environment
processing trade
policy reform
China
JEL: 
D23
F14
L22
Document Type: 
Working Paper

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