The Effects of Product Density on China’s Export Technological Complexity Upgrading: The Role of Industrial Agglomeration

Using the matching data of the UN COMTRADE, China Customs, and China Industrial Enterprise database from 2000 to 2013, we explore the relationship between product density and the export technological complexity at the enterprise level. We find product density at the firm level has a significant positive effect on the export technological complexity of Chinese manufacturing enterprises. The result remains still robust after adopting instrumental variable method, replacing explanatory and explained variables and substituting more detailed data for the proxy variables. Both specialized agglomeration and diversified agglomeration have significant positive effects on the export technological complexity. The results of moderating effect test indicate that specialized industry agglomeration has significantly reinforced the abovementioned effects as a moderator. However, diversified agglomeration significantly inhibits the technological upgrading effect. Heterogeneity tests show that product density is more conducive to the upgrading of the export technological complexity of enterprises in the eastern region, and so are to the foreign‐funded, capital‐intensive, and technology‐intensive enterprises.