A Study On The Impact Of Import Sophistication On Firms’ Total Factor Productivity

With the transformation of China’s foreign trade structure from “emphasis on export” to “equal emphasis on import and export" and then to “actively expanding import”,the relationship between import and total factor productivity of firms has increasingly become the structural source of import trade gains,and focusing on manufacturing industry imports is crucial to transform China from a manufacturing giant into a world manufacturing power.With the deepening of international trade and division of labor,the focus of import trade has gradually shifted from "quantity" to"quality".A large number of studies have explored the impact and mechanisms of the type and quality of imported products,tariff and import sources on firms’ total factor productivity.Firms’ import sophistication is an important component of the import structure,the study on the impact and mechanism of Chinese industrial firms’ import sophistication on total factor productivity of firms plays an important part in optimizing the import structure of Chinese manufacturing industry,realizing industrial transformation and upgrading,and transforming China into a manufacturing power,which also enriches the research on import,the transformation and upgrading of domestic industrial structure and the optimization of consumption structure.Firstly,the thesis is based on trade theory of heterogeneous firms,product space theory and capability theory,the theoretical model of the influence of import sophistication on firms’ total factor productivity is preliminarily described.Besides,two hypotheses of production complementarity mechanism and cost saving mechanism are proposed,which include four channels: technology spillover,product variety enrichment,import competition and market scale expansion.Secondly,after describing the measurement method and the relevant characteristic facts of import sophistication and total factor productivity of Chinese industrial enterprises from 2001 to 2007,empirical research is carried out by combining China’s Industrial Enterprise Database,the Customs Trade Database,CEPII-BACIand product differentiation data from 2001 to2007,etc.On the basis of the results of the baseline regression,endogeneity was treated by using instrumental variable method.Through channel test and heterogeneity test,the thesis tries to verify the hypothesis proposed above,and summarizes the differential impact of import sophistication on total factor productivity under different circumstances.Then,the thesis make additional analysis combined with four external factors: the number of import source,type,import volume and the concentration of the source of imports.Finally,based on relevant theories and empirical results,the thesis puts forward corresponding countermeasures,suggestions and research prospects.The empirical results show that:(1)the increase of industrial firms’ import sophistication will promote the improvement of total factor productivity.After the endogeneity treatment,the thesis replaces the method of calculating total factor productivity and import sophistication,and uses different sample to repeat the empirical test,the results are still robust.(2)The promotion effect will be different with the ownership of the enterprise,the type of trade,the type of imported products,the labor productivity and the location of the enterprise.In general,Foreign-funded enterprises,enterprises mainly engaged in general trade,enterprises mainly importing capital goods and intermediate goods,enterprises with high labor productivity and enterprises in the eastern region have a more obvious promotion effect on the improvement of total factor productivity.(3)The increase of the import sophistication mainly affects total factor productivity through the complementary mechanism of up-production,while the effect of cost reduction mechanism is not significant.(4)From the perspective of import sources,compared with developing countries,both the increase in the type of import sources and trade volume from developed countries can effectively promote the effect of the increase in the firms’ import sophistication on the improvement of total factor productivity.Besides,increasing the competition between importing countries is also conducive to the absorption of technology spillover effects.