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In 1999, the Chinese government implemented the university enrollment expansion policy, which resulted in the rapid increase in college graduates in 2003. This study conducts a quasi-natural experiment and uses the difference-in-difference (DID) method to deeply analyze the impact of human capital expansion on firms’ export product quality. Robustness tests revealed that human capital expansion significantly improves the export product quality of Chinese manufacturing firms. Fixed asset investment and innovation of firms must be promoted for human capital expansion to improve firms’ export product quality. A significant amount of heterogeneity exists in how human capital expansion impacts the export product quality across various types of firms.

Human capital expansion and firms’ export product quality: Evidence from China