From Import Penetration to Quality Upgrading: Evidence from China’s High-Tech Sectors

China’s quality-driven growth strategy emphasizes increased import penetration and integration into global value chains. This study investigates whether import penetration raises export quality and identifies the mechanisms involved. Using matched data from the CEPII-BACI database and the China High-Tech Industry Statistical Yearbook, it quantifies import penetration and evaluates export quality with the ternary marginal decomposition methodology. The increase in import penetration notably enhances export quality, and this conclusion remains consistent across multiple tests. Additionally, the impact is stronger in industries with greater absorptive capacity, increased competition, and deeper global value chain embeddedness. The analysis of mechanism identifies spillover and competition effects as direct drivers, with technological innovation serving as mediating channels, and we distinguish strategic innovation from substantive innovation. Comparing intermediate and capital goods, we find that import penetration of intermediate goods contributes significantly to the majority of quality improvements. Overall, these findings imply that optimizing import structure and enhancing absorptive capacity can accelerate the upgrading of export quality.