Topic: Upstream Capital Exports and Downstream Productivity: The Role of Domestic Production Networks

Speaker: Prof. Larry Dongxiao QIU, Sydney S. W. Leong Chair Professor of Economics and Head of the Department of Economics of Lingnan University, Hong Kong

Date: 14:15-15:45, April 23^rd, 2025 (Wednesday)

Venue: T1-302-R1

Language: English

Abstract:

How does technology diffusion along the global supply chain benefit firms through the domestic product network? This paper examines the impact of a country’s upstream exports of intermediate inputs-specifically capital goods and intermediate goods-on the productivity of domestic downstream firms, utilizing data from China. By instrumenting Chinese exports with world imports from other countries, we find that exports of upstream capital goods, rather than intermediate goods, exert a significant positive impact on the productivity of downstream firms. Our analysis of underlying mechanisms reveals that capital goods exports enhance the domestic supply chain by improving product quality, increasing the number of Chinese firms engaged in exporting these goods, expanding the range of export destinations, and raising the average productivity within the industry. Furthermore, we provide evidence that these productivity gains correlate with increased utilization of domestic capital goods by downstream firms. We also find that the positive impact on downstream productivity is more pronounced when upstream capital goods are ordinary imports instead of processing imports or are directed toward higher-income markets.

Biography:

Professor Qiu obtained his PhD from the University of British Columbia. He is currently Sydney S. W. Leong Chair Professor of Economics and Head of the Department of Economics of Lingnan University, Hong Kong. He joined the Hong Kong University of Science and Technology in 1993 as an Assistant Professor, later becoming an Associate Professor and Full Professor. He moved to the University of Hong Kong in January 2008 as a Full Professor and later as Chung Hon-Dek Professor in Economic Development. He served as Associate Dean of the Faculty of Business and Economics at HKU. He joined Lingnan University in 2020. He is a senior researcher in the Center for International Finance and Economics Research (CIFER), National Institute of Financial Research, Tsinghua University.
Professor Qiu is the Founding President of China Trade Research Group and was President of the Hong Kong Economic Association (2015–2019). He was a distinguished visiting professor/scholar in various universities including Tsinghua University and Kobe University.