What Drives China’s Exports: Evidence from a Domestic Consumption Expansion Policy

The relationship between domestic demand and exports has remained the focus of academic world for a long time. A large body research confirmed promotion effect international trade on demand. This study uses difference-in-difference (DID) model to estimate instrumental variables. In addition, we have discussed that China’s “Home Appliances Countryside” policy as an variable it affects through two-stage least squares (2SLS) method. empirical results show expanding can significantly promote exports. internal mechanism is subsidy stimulates demand, which improves total factor productivity (TFP). TFP could enhance competitiveness enterprises effectively. Furthermore, this negates channel prices decline in promoting export. series robustness test policies boost provides evidence solid complementary home appliance industry.