Empirical and theoretical studies of product quality and multinational firms in international trade

This thesis consists of three topics. Each of them is self-contained in one chapter and can be read independently. The empirical chapter on the contribution of product quality to China's export performance during 1991-2004 employs Dixit-Stiglitz "love of variety" formulation to calculate quality measure at 3-digit SITC level. The regression results suggest that doubled quality level of China's exports was associated with 4.6 percentage-point gain in destination export market share.; The following chapter of partial equilibrium analysis extends Markusen's single-firm plant location model to further allow separable intermediate production stage. This chapter attempts to reconcile the empirical findings of fewer occurrences of pure horizontal and vertical firm types with standard model of FDI location choice by exploring the role of intermediate plant-level scale economies and trade costs associated with intermediate products.; A computable general equilibrium analysis is employed in the last chapter to model the effects of knowledge spillover from FDI on factor price, production activity, trade, unit expenditure and real consumption. The simulation results suggest that FDI-importing country gains in welfare in both regime shift of investment liberalization and knowledge spillover, while FDI-exporting country loses.