Impact of going public on quality upgrading of export products: evidence from China’s manufacturing firms

ZHU Shujin1 TANG Chao1

(1.School of Economics & Trade, Hunan University)

【Abstract】For the first time, this paper investigated the effect and mechanism of going public on the quality upgrading of export products. Based on the theoretical mechanism of the effect of going public on the quality upgrading of export products from the aspect of management quality, complexity of production technology and quality of intermediate inputs, this paper used the matched data of China’s public firms data, China Industrial Enterprises Database and China’s Customs database from 2000–2013 to provide an empirical test. The results show that going public has a significant promoting effect on the quality upgrading of export products, and in the long run, the effect has one-year lag period and then shows sustainability. After the method of regression estimation and the measurement of key variables are changed and potential omitted variables are controlled, the results are robust. Furthermore, the mediation effect model is used to test the mechanism and the results show that the improvement of management quality and the complexity of production technology are the channels of promoting the quality upgrading of export products, but the channel of improving the quality of intermediate inputs is not available. The conclusion shows that equity financing is beneficial to the quality upgrading of export products, and the management quality improvement arising from the high proportion of long-term institutional investors, production technology innovation and improvement, and the use of diversified intermediate inputs play an important role in the quality upgrading of export products. Therefore, this paper has important policy implications for China to deepen the structural reform of financial supply side and cultivate new competitive advantages for export firms.

【Keywords】 going public; export product quality; long-term institutional investors; management quality; complexity of production technology;


【Funds】 National Natural Science Foundation of China (71573076) The National Social Science Fund of China (18VSJ055)

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    [1]. ① Data come from National Bureau of Statistics of China ( [^Back]

    [2]. ① This paper has adjusted different versions of HS codes at 6-digit and make it consistent to the 1996 version. [^Back]

    [3]. ① This paper has also examined the changes in quality of export products adjusted by country-product and time before and after a firm has gone public. The results are shown in the appendix on the website of China Industrial Economics ( [^Back]

    [4]. ① The results on the balance diagnostics of propensity score matching can be found in the appendix on the website of China Industrial Economics ( [^Back]

    [5]. ① This paper has also visualized the coefficients of key terms in a diagram, as shown in the appendix on the website of China Industrial Economics ( [^Back]

    [6]. ②Before running regression, this paper has also examined whether the density function of the driving variables differs significantly on the breakpoints, as shown in the appendix on the website of China Industrial Economics. For the first-stage regression results, see the appendix on the website of China Industrial Economics ( [^Back]

    [7]. ① This paper has also used the 1:3 matching ratio as well as the nearest neighbor matching PSM within a caliper for robustness test. In the meantime, this paper has also performed robustness test on the quality of export products after standardization and that measured by σ = 5 and σ = 10. Regression results can be found in the appendix on the website of China Industrial Economics ( [^Back]

    [8]. ② The exact calculation steps of different types of institutional investors can be found in the appendix on the website of China Industrial Economics ( [^Back]

    [9]. ① Following Bloom et al. (2018), this paper has also used firms’ intermediate inputs-number of the country of origin as a proxy for the complexity of production technology. Results are shown in the appendix on the website of China Industrial Economics ( [^Back]

    [10]. ① The treatment of standardization and summation equation can be found in the appendix on the website of China Industrial Economics ( [^Back]


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This Article


CN: 11-3536/F

Vol , No. 02, Pages 117-135+1-8

February 2020


Article Outline


  • 1 Introduction
  • 2 Analysis of the impact mechanism of public listing of firms on the upgrading of export product quality
  • 3 Data sources, variable definitions and descriptive statistics
  • 4 Baseline regression and robustness test
  • 5 Examination of the impact mechanism
  • 6 Conclusion and policy implication
  • Footnote