A Study On The Impact Of Trade Policy Shocks On Upgrading The Quality Of Chinese Digital Export Products

Since China’s accession to the WTO,it has taken the initiative to implement a series of open foreign trade policies,which have greatly increased the level of China’s openness to foreign trade.In the process of opening up to the outside world at a high level in the new round,China has been building a new system of open economy,promoting a new pattern of opening up to the outside world,and changing the focus of its foreign trade policy from"encouraging exports" to "encouraging exports" and "expanding imports".The focus of its foreign trade policy has changed from "encouraging exports" to "encouraging exports" and"expanding imports",and has actively adopted a series of measures to "expand imports",including lowering tariff rates and building free trade zones and free trade ports.In terms of exports,China has for some time created a miracle of export growth by reducing export costs with its low labor advantage.However,this crude trade growth model is unsustainable in the increasingly fierce international competition.China urgently needs to change its foreign trade development model and build a "strong trade nation" by improving product quality and valueadded to achieve sustainable and high-quality economic development.In the context of the Fourth Industrial Revolution,the digital economy is rapidly emerging and the concept of digital trade has emerged.2020 Newcastle pneumonia epidemic ravaged the world,inhibiting the global movement of labor and goods,while advanced digital technology can minimize the economic disruption caused by the epidemic,and companies from all over the world have opened up online remote "cloud office" working mode,using virtual methods "The digital trade has grown in spite of the epidemic,as companies from all over the world have started to work remotely online,signing contracts virtually and opening up new businesses and models to mitigate the impact of the epidemic.Therefore,it is of great practical significance and policy implications to accurately measure the changing trends in the quality of China’s digital export products since the 21 st century,to analyze and examine them from the perspective of trade policy shocks in a comprehensive manner,and then to make clear judgments and effective responses to trade policy issues related to China’s digital export products,so that China’s digital trade can develop sustainably.In the process of formulating trade policy,it is not only necessary to consider factors such as the quantity,quality and price of imported and exported products,but also the role of heterogeneous characteristics of different industries in upgrading quality,etc.Influencing the quantity and price of imported products through trade policy tools such as tariffs and nontariff barriers is the main objective of trade policy,while quantity competition and price competition are supported by quality.As one of the sources of high-quality economic development,the quality of products exported by digital industries can more appropriately reflect the high-quality development of a country’s economy.Therefore,a systematic study examining the impact of these factors on export product quality using product-level data from the perspective of product tariffs,frontier distance of imported product quality,unit product value and industrial development variability not only enriches the study of the relationship between trade policy shocks and digital export product quality,but also provides a theoretical basis and application reference for optimizing the coordination of trade and industrial policies in China’s digital industry.This thesis focuses on a theoretical and empirical investigation into the impact of trade policy shocks on the quality of digital export products.Theoretically,do trade policy shocks have a direct and significant impact on the quality of export products? Or do they need to be influenced indirectly through the media? What is the theoretical mechanism by which the impact is caused? In the process of policy transmission,are the effects of trade policy fully transmitted to export product quality,or only partially? Empirically,how can econometric models be constructed to test the direct and indirect effects of trade policy shocks on upgrading the quality of digital export products? And how can the incomplete transmission mechanism of trade policy be analyzed? Is further decomposition of the outcome variables necessary and what are the policy implications of doing so? This thesis adopts a combination of literature analysis,statistical analysis,theoretical deduction and structural equation methods to analyze the theoretical mechanisms,empirical results and policy measures of trade policy shocks affecting the quality of digital export products,following the research lines of theoretical laying out,mechanism investigation,typical factual analysis,empirical research and recommendations.Seven chapters are devoted to the analysis of the above issues.Chapter 1 covers the background and significance of the topic,the definition of the core concepts involved(export product quality,digital industry,trade policy shocks and quality frontier distance),the research content and framework of the thesis,the main research methods and the possible innovations and shortcomings of the thesis.The literature review in Chapter 2 focuses on the following three sections: a study on export product quality and its influencing factors,a study on the relationship between trade policy shocks and export product quality,and a study on the connotation,characteristics,matching and accounting of digital trade.Chapter 3 analyzes the theory of trade policy shocks affecting the upgrading of export product quality,starting from the consumer demand function and producer function,introducing quality frontier distance and tariffs into the model,constructing a model of the relationship between trade policy shocks and export product quality,followed by elaborating the intrinsic mechanisms of trade policy shocks affecting the upgrading of export product quality from four perspectives: trade costs,quality transmission,market structure and market competition respectively On this basis,four research hypotheses are proposed,and corresponding empirical tests of the hypotheses are conducted in the subsequent chapters.Chapter 4 presents typical facts on China’s digital trade policy and export product quality,compares the evolution of China’s digital trade policy,describes the scale and structural characteristics of China’s digital trade in recent years,and measures the quality of China’s digital manufacturing export products and digital service industry exports accordingly,analyzing changes in tariff policies for imported products and changes in the Digital Services Trade Restrictiveness Index(DSTRI)The intuitive impact on changes in export product quality.Chapter 5 empirically analyzes the impact of trade policy shocks on the export product quality of China’s digital manufacturing industry,with unit product value as a mediating variable and quality frontier distance as a moderating variable,using product-level data of China’s digital industry from 2007-2019 to construct a structural equation model to investigate the direct effects,indirect effects and total effects,and conducts mediating effects tests,moderating effects tests and robustness test analyzes to test the hypotheses in the theoretical section.Chapter 6 uses kernel density estimation of digital manufacturing export product quality and decomposes digital export product quality to explore more deeply the impact of trade policy shocks on each decomposition indicator of China’s digital manufacturing export product quality upgrading.Meanwhile,the variance decomposition and impulse response function methods are used to investigate the contribution and impact of each decomposition indicator on China’s digital manufacturing export product quality upgrading to further test the theoretical hypothesis.Chapter 7 summarizes the findings and makes policy recommendations.Through relevant theoretical analysis and empirical research,the following conclusions were mainly obtained.(1)The direct effect of import tariffs on the quality of digital export products is statistically insignificant,but a decrease in tariffs will indirectly improve the quality of digital export products by raising the value of the unit product,and this indirect effect is statistically significant.Due to the trade cost effect and quality transfer effect,lowering import tariffs will directly lead to a decrease in the price of imported intermediate inputs,lowering the production costs of enterprises and enabling them to have more capital to invest in digital technology research and development with no change in total investment,thus promoting the improvement of the quality of China’s digital export products.(2)Trade policy affects digital export product quality through the mediating variable unit product value,a process that is in turn moderated by import product quality frontier distance,i.e.,there is a moderating mediating effect that is significant.The estimation results of the structural equation model show that the effect of tariff rate on unit product value is significantly negative,the effect of unit product value on digital export product quality is significantly positive,and the direct effect of tariff rate on digital export product quality is statistically insignificant,indicating that unit product value is a fully mediating variable.The moderated mediating effect decreases with larger values of the moderating variable import product quality frontier distance,indicating that the effect of tariff rate on digital export product quality is moderated by import product quality frontier distance.The test results for the mediating and moderating effects are consistent with the findings of the theoretical model and mechanism analysis.(3)Trade policy shocks also have a policy transmission to export product quality through market structure effects and market competition effects.Under a trade policy shock favoring an open market type,the quality of China’s digital export products is negatively related to the market share of imported intermediate inputs,i.e.,the higher the diversification of imported intermediate inputs and the higher the number of sources,i.e.,the smaller the market share of each imported intermediate input,the faster the quality of digital export products improves.In the empirical estimation results,the direction of influence of market share is consistent with the findings of the mechanism analysis.(4)The kernel density estimation results show that there is dynamic convergence in the upgrading of the quality of China’s digital export products.By decomposing export product quality,using impulse response functions and variance decomposition methods,it is found that neither a single change in digital export product quality nor a single change in market share contributes significantly to the upgrading of export product quality,but when both changes together form a resource reallocation effect,digital export product quality shows a substantial upward trend.(5)DSTRI showed a significant downward trend in 2018,indicating that various restrictive measures on digital services trade are continuing to be substantially relaxed and barriers to digital services trade continue to be cut.The quality of China’s digital services trade exports rose at a faster rate from 2014 to 2019,but showed a slowing momentum in2020,which may be caused by the decline in China’s GDP per capita growth rate.The innovations in this thesis are mainly in the following three areas.(1)Improvement of the theoretical model.On the basis of the quality determination model,the frontier distance of imported product quality is introduced into the export product quality model,emphasizing the incomplete transmission of trade policy,analyzing the interaction effects between variables,analyzing both direct and indirect effects,and discussing in depth the mechanism of the effect of trade policy shocks on export product quality.(2)Innovation in research perspective.Starting from digital trade products,we explore the impact of trade policy shocks on the quality of export products.Meanwhile,in terms of digital industry classification and data selection,digital industries are defined according to the Statistical Classification of the Digital Economy and its Core Industries(2021),whereby data on digital industries and digital trade are matched more accurately,and the heterogeneity of the core industries of digital trade is further analyzed according to these classifications,thus enriching the research in this area.(3)Application of research methods.Structural equation modelling is used to study the impact of trade policy shocks on the quality of Chinese digital export products,examining not only the effect of trade policy but also the moderating effect of quality frontier distance and the mediating effect of unit product value.Finally,the decomposition of export product quality reveals that the contribution of the reconfiguration effect to the upgrading of export product quality is much larger than the within-group and between-group effects.