China has defied the declining trend in domestic content in exports in many countries. We study China's rising domestic content in exports using firm- and customs transaction-level data. Our approach embraces firm heterogeneity and hence reduces aggregation bias. We find that the substitution of...

The issue of measuring product variety has received relatively little attention due to its inherent difficulty. In the language of index numbers, an expansion in the range of inputs or outputs is a 'new goods' problem: a good that is newly available will have an observed price and quantity, but...