Determinants of exports in China: A microeconometric analysis

Abstract

Based on data from more than 100,000 Chinese manufacturing firms, this study explores the reasons for the recent surge of manufacturing exports from China. Research and Development (R&D) investment has not been a contributing factor to the export success of Chinese firms, even in high-technology sectors. Although exportation of high-technology products has been dominated by foreign manufacturing firms, domestic firms have invested more heavily in R&D than their foreign counterparts. The role of low labour cost in the rise of the Chinese manufacturing industries is inconclusive as suggested by the econometric evidence. However, the major contributors to the increase in Chinese exports are collaboration with foreign investors and fierce domestic competition.