Multi-Product Firms, Product Switching and Exports in a Developing Country: Evidence from China

Abstract

This research studies a far less explored issue: export product switching activities within-firms and their impact on exports from a large developing country, China. First, we find that multi-product export firms and their product switching activities are widespread in China. Second, the role of trade regime is considered and we find that processing exporters switch their export products less frequently. Finally, results show that adding and churning export products within-firms positively improves China's exports; while dropping export products presents a negative impact. Meanwhile, processing exporters can hardly benefit from export product switching activities.