Deepening of Free Trade Agreement Participation and Firm-Level Export Product Quality

Abstract

Deepening of free trade agreement (FTA) participation is a core strategy for enhancing firm-level export quality and efficiency, addressing competitive pressures in international markets, and achieving high-quality economic development. Based on the measurement of the firm-level deepening of FTA participation indicator, this paper explores its impact on firm-level export product quality and the underlying mechanisms. Research results indicate that deepening of FTA participation promotes the upgrading of firm-level export product quality, a conclusion that remains robust after endogeneity tests and multiple robustness checks. Mechanism analysis results reveal that deepening of FTA participation impacts firm-level export product quality by improving intermediate goods input quality and reducing intermediate goods input cost. Heterogeneity analysis results indicate that deepening of FTA participation has a more significant positive impact on the export quality of firms with stronger institutional linkage intensity, greater dependence on international supply chains, and those not located in high-level opening-up zones. Structural decomposition and export dynamics analysis results demonstrate that deepening of FTA participation drives quality upgrading by facilitating the exit of low-quality products and the entry of high-quality products through the survival-of-the-fittest effect. In the context of a complex and volatile international environment, this paper provides theoretical foundations and policy implications for Chinese firms to cope with changes in the external environment and achieve high-quality development of export trade.

Keywords

free trade agreement (FTA) / deepening of participation / export product quality / intermediate goods / high-quality development

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