Does property rights protection affect export quality? Evidence from a property law enactment

Abstract

Property-rights protection is important for a host of aspects. This paper explicitly examines its effect on export quality, using the 2007 property law enactment in China as a natural experiment. We find that a firm's export quality increases after the law enactment, and the positive effect is more pronounced for non-state-owned private firms and foreign-investor-controlled firms, for firms specializing in trade with middle- and low-income countries, and for firms located in regions with better legal and other institutional environment. Overall, these results suggest that property-rights protection strengthens a country's international competitiveness through improving its export quality.