Technical Regulations and ExportQuality: Evidence from Supply Chainsin China

Ma Yeqing1, Wang Guanyu*2

1 School of Economics, Nanjing University, Nanjing, China

2 School of Economics, Wuhan University of Technology,

Wuhan, China

Abstract: As global trade networks deepen and trade patterns evolve, supply chaindynamics have emerged as a critical driver of high-quality development—particularly asreflected in firms’ capacity to export higher-quality products. Drawing on new-new tradetheory, this study incorporates supply chain behavior—specifically, the use of intermediategoods—into the analytical framework for determining export product quality. Theoretically,it posits that technical regulations on the supply chain influence export quality throughtwo key channels: improvements in the quality of intermediate inputs and changes in theirassociated costs. Empirically, the study exploits China’s imposition of technical barriers to trade(TBT) on intermediate goods imports as a quasi-natural experiment, applying a difference-indifferencesapproach to firm-level export data from 2000 to 2014. The results show that supplychain technical regulations lead to significant improvements in the quality of exported finalproducts. Mechanistically, the regulations raise the quality of imported intermediates, whichin turn drive upgrades in final outputs, while leaving import costs largely unchanged—sincecompliance expenses are absorbed by foreign exporters rather than passed on to Chinesefirms. Further analysis reveals substantial heterogeneity in these effects, depending on boththe type of regulation and firm characteristics. These variations reflect differences in regulatoryintensity and in firms’ sensitivity to supply chain changes, adaptability, and capacity toconvert input quality into product upgrades. Overall, the findings suggest that strengtheningsupply-side regulatory standards—when properly designed—represents a strategic leverfor improving product quality and enhancing firms’ international competitiveness, offeringvaluable insights for trade policy and global supply chain governance.

Keywords: Supply chain; Technical regulations; Export product quality; Intermediate input

JEL Classification Codes: D21; F14

DOI: 10.19602/j.chinaeconomist.2025.09.05