Higher trade costs lead to more export of high quality products
The article explores how the quality of exports in trade between China and developing countries impacts economic outcomes. By analyzing trade data from 2000 to 2008, it was found that China exports high-quality products to countries like South Africa, Russia, Thailand, and Malaysia. The study also shows that larger markets and higher trade costs lead to more high-quality exports. Additionally, foreign direct investment (FDI) inflows have a significant impact on export quality in both the short and long term.