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Open AccessArticle

Institutional Quality and Sustainable Development of Industries’ Exports: Evidence from China

by Feifei Wu 1,* and Xinyu Yan 2
1
School of Economics, Hefei University of Technology, Hefei 230601, China
2
Business and Economics, The University of Melbourne, Melbourne, VIC 3053, Australia
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(11), 4173; https://doi.org/10.3390/su10114173
Received: 24 October 2018 / Revised: 5 November 2018 / Accepted: 8 November 2018 / Published: 13 November 2018
(This article belongs to the Special Issue Sustainability in Asian Emerging Markets)
The knowledge about the relations between domestic institutional quality and the sustainable development of exports in emerging markets remains limited, since most research into the relations between the institutional environment and the sustainable development of exports has been conducted in developed market economies, especially in those of North America and Europe. With dynamic changes in the institutional environment of emerging countries over the years, this paper provides a novel perspective for investigating the relations above. This is the first paper to investigate the impact of institutional quality on the sustainable development of industries’ exports in emerging countries from a comprehensive perspective of multiple institutional environments and multi-dimensional industries’ heterogeneity. On the basis of defining institutional quality and industry heterogeneity, this paper explores the underlying mechanisms of institutional quality affecting sustainable development of industries’ exports and conducts empirical analyses by using the data from China’s 20 industries’ exports to 117 countries for the period of 1996–2011. The results show that: (a) Industries with higher degrees of financial dependence or higher product technical complexities have export comparative advantages in better financial environments; (b) Industries with higher research and development (R&D) intensity or a higher concentration of intermediate inputs have export comparative advantages in better legal environments; (c) The differences in the level of financial development or in the efficiency of legal system would influence the effects of interactions between institutional quality and industry heterogeneity on the sustainable development of industries’ exports. The present paper provides new evidence that institutional quality does promote the sustainable development of industries’ exports in emerging countries. These results indicate that exports of heterogeneous industries in emerging economies are an adaptive response to the specific institutional environment, as well as a continuous release of institutional dividends with the improvement of the institutional environment. View Full-Text
Keywords: institutional quality; sustainable development; comparative advantage; heterogeneous industries; financial development level; legal system efficiency institutional quality; sustainable development; comparative advantage; heterogeneous industries; financial development level; legal system efficiency
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Wu, F.; Yan, X. Institutional Quality and Sustainable Development of Industries’ Exports: Evidence from China. Sustainability 2018, 10, 4173.

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