DOES IMPORTED PRODUCER SERVICE AFFECT MANUFACTURING EXPORT? EVIDENCE FROM CHINA

Based on a panel data of 44 countries and 18 industries spanning 14 years, this paper provides a novel insight into the driving force behind the expanding volume of China's export. We match the global input-output database with micro-level data from Chinese manufacturing firms and find a positive effect of imported producer service inputs on domestic manufacturing exports. Foreign producer service inputs assist domestic firms in entering foreign markets and maintaining foreign relations, thus contributing to their exporting performance. The results confirm the specialization effect and information cost reduction effect led by imported service inputs.