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

Defever, Fabrice; Imbruno, Michele; Kneller, Richard

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Authors

Fabrice Defever

Michele Imbruno



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.

Citation

Defever, F., Imbruno, M., & Kneller, R. (2020). Trade liberalization, input intermediaries and firm productivity: Evidence from China. Journal of International Economics, 126, https://doi.org/10.1016/j.jinteco.2020.103329

Journal Article Type Article
Acceptance Date Apr 6, 2020
Online Publication Date May 11, 2020
Publication Date Sep 1, 2020
Deposit Date Apr 7, 2020
Publicly Available Date Mar 28, 2024
Journal Journal of International Economics
Print ISSN 0022-1996
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 126
Article Number 103329
DOI https://doi.org/10.1016/j.jinteco.2020.103329
Keywords Firm heterogeneity; Trade liberalization; Intermediate inputs; Productivity; Intermediaries; China
Public URL https://nottingham-repository.worktribe.com/output/4266291
Publisher URL https://www.sciencedirect.com/science/article/abs/pii/S0022199618301636?via%3Dihub

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