Long-term orientation and export product quality: evidence from China

It has been long recognized that long-term orientation (LTO), as an intrinsic cultural trait, plays a pivotal role in shaping individual and organizational behavior. This paper empirically examines the effect of the degree of managerial LTO on export product quality by constructing firm-level LTO indicators based on a large language model (BERT), using firm-product-level data from Chinese exporters. Our empirical evidence indicates that the managerial LTO plays a positive role in upgrading the quality of export products, and the results remain robust against a variety of tests. Given the endogeneity issues, we employ Chairmen’s severe natural disaster experiences during their early lives as the instrumental variables of LTO. The instrumented results are consistent with our baseline claim. In addition, further research finds that at the firm level, the channels through which LTO takes effect on export product quality upgrading include strengthening R&D investment, innovation ability, and using high-quality intermediate imports. Eventually, heterogeneity analysis indicates that the positive effect of LTO on export quality is more significant for ordinary trade model, private-owned firms, technology-intensive industries, and products exported to high-income countries.