Trade liberalization, input intermediaries and firm productivity: evidence from China

Defever, Fabrice, Imbruno, Michele and Kneller, Richard (2019) Trade liberalization, input intermediaries and firm productivity: evidence from China. CEP Discussion Papers (CEPDP1666). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2019 The Author(s)
Divisions:	LSE
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce
JEL classification:	F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations
Date Deposited:	17 Feb 2020 13:12
Last Modified:	11 Dec 2024 19:33
URI:	http://eprints.lse.ac.uk/id/eprint/103453

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