Export Upgrading in an Era of Globalization: Cases from China's Export Zones.

China's export sector has often been criticized for its exclusive reliance on cheap and low-skilled labor. Over the past decade, however, the country's major export zones have launched important export upgrading programs that promote branding and technological innovation through government-organized competitions. Despite similarities in resource endowments, the outcomes of the upgrading effort differed substantially. While exporters in some localities are still locked in price wars based on razor-thin margins of profits, those in other localities have begun to move up the value chain with branding and product design. Based on a comparative study of three localities in coastal China, the paper finds that the variation of local export upgrading capacity stems from the interplay of two sets of local institutions: institutions that govern local export activities (including inter-producer and producer buyer relations) and institutions that define government-business relations through the upgrading programs. By examining how the interaction of the two shaped the strategies of local officials, enterprises, and foreign buyers, the paper draws attention to the importance of compatibility between micro and macro institutions. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]