Economic Policy Uncertainty and Firms Export Products Quality: An Empirical Analysis Based on the Micro-Data of Chinese Industrial Firms

Abstract

Abstract: It is of great significance to evaluate the economic effects of economic policy uncertainty in order to fully understand the role of economic policy. By employing a cross-border data model, this paper examines the impact of economic policy uncertainty on export product quality of firms. The finding show that the increase of domestic economic policy uncertainty would increase the variable costs of corporate production and decrease the fixed asset investment of the enterprises, which goes against the corporate efforts to improve the quality of their export products. If the economic policy uncertainty in export destination countries increases, the export enterprises would overcome the adverse effects resulted from the increased fixed costs of export due to the increased economic policy uncertainty in destination countries through the improvement of the export product quality. In addition, the influence of economic policy uncertainty on export products quality of firms also reveals a certain degree of heterogeneity.

Key words: economic policy uncertainty, firms export, products quality, heterogeneity

XIE Shen-xiang, FENG Yu-jing. Economic Policy Uncertainty and Firms Export Products Quality: An Empirical Analysis Based on the Micro-Data of Chinese Industrial Firms[J]. JOURNAL OF CONTEMPORARY FINANCE AND ECONOMICS, 2020, 0(2): 69-80.

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