Research On The Influence Of Institutional Quality On Export Product Quality

Institutional quality is crucial to product quality upgrading of a country.The study of institutional quality and trade product quality issues stems from the study of the relations between institutional quality and international trade: With the continuous improvement of product quality measurement methods,the research on the relations between the institutional quality and international trade can be promoted to the level of microscopic product quality.Based on the existing related research and availability of data,this paper attempts to explore the impact of institutional quality on the quality of trade products,and discuss one of these mechanisms.Firstly,this paper reviews the related researches on institutional quality and trade product quality problems,and puts forward three hypotheses to be tested on the basis of relevant theoretical research:(1)Institutional quality improvement has a certain degree of positive effect on the quality upgrade of export products.(2)Institutional quality can improve product quality through the promotion of R&D incentives;(3)For countries with different levels of institutional quality,the effect of improving export product quality through institutional quality improvement in low-level institutional quality countries is even more pronounced.Secondly,on the basis of relevant theoretical research and three assumptions,this paper constructs a theoretical model between institutional quality,R&D input and export product quality.Based on the theoretical model,using the product quality data provided by Feenstra & Romalis(2014)of more than 200 countries and regions in the world,we calculated 46 economies’ export quality index from 2000 to 2011.And using the fixed effect model to regress the total sample and the grouped sample respectively,we make a brief analysis of the regression results as well.Finally,combining with the measurement results and related theoretical researches,this paperanalyzes the impact of institutional quality improvement on the upgrading of export product quality,the interaction of institutional quality and R&D investment on the upgrading of export product quality,based on the aspects above we summarize the empirical results of this paper and propose corresponding policy recommendations.The empirical research in this paper indicates that improving the institutional quality of a country can improve a country’s overall product quality.Secondly,the positive effect of institutional quality on the export products quality is even more pronounced in the national sample with low institutional quality.Finally,Regardless of whether it is a country with a high institutional quality or a country with a low institutional quality,the interaction of institutional quality and R&D investment has a significant positive impact on the quality of export products,which indicates that Regardless of whether a country with a high institutional quality or a country with a low institutional quality,the level of the rule of law and the degree of protection of property rights in a country can be used to incentivize and secure innovation so as to significantly promote the product quality of a country.