Input tariffs, speed of contract enforcement, and the productivity of firms in India

Ahsan, Reshad N.

doi:10.1016/j.jinteco.2012.11.006

Cited by 64 publications

(50 citation statements)

References 22 publications

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“…Thus far, our analysis has not taken the heterogeneous regional institutional environment into account, which has been emphasized in many studies, such as Araujo and Ornelas (), who develop a model in which agents build reputations to overcome the institutional failure of weak enforcement of international contracts, and they find that good institutional quality can enhance trade in the short run. Similarly, using firm‐level panel data from India, Ahsan () extends the literature on trade liberalization and firm productivity by examining the complementarities between the speed of contract enforcement and the productivity gains from input trade liberalization, which confirms that rapid contract enforcement is beneficial for the maximization of productivity benefits from input trade liberalization. Considering that there are significant differences in the level of regional institutional environment across regions in China, this section addresses such a concern through a further investigation into the relationships among the regional institutional environment, imported inputs and firms’ export quality.…”

Section: Heterogeneity Analysismentioning

confidence: 73%

On the relationship between intermediate input imports and export quality in China

Mao

2018

Econ Transit

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This paper studies the connection between intermediate input imports and firms’ export quality using firm‐level data from 2000 to 2007. Our regression results show that intermediate input imports promote manufacturing firms’ export quality through ‘variety effects’ and ‘innovation effects’, though the effects are significantly different among firms with different characteristics, and the magnitude of these effects differs across import sources and the quality of imported intermediate inputs themselves. Moreover, we find that a good institutional environment is conducive to the strengthening of the positive influence of intermediate input imports on export quality. Furthermore, the dynamic decomposition demonstrates that the reallocation effect is the key force through which imported inputs boost industrial aggregate quality growth. Taken together, these results suggest that product upgrading facilitated by quality embedded in imported intermediate inputs, a good institutional environment and market share reallocation help Chinese firms to improve the quality of their export products.

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Section: Heterogeneity Analysismentioning

confidence: 73%

On the relationship between intermediate input imports and export quality in China

Mao

2018

Econ Transit

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“…However, the above analysis ignores the role of institutional environment where the firms are located. As pointed out in Ahsan (2013), although input trade liberalisation increases the range of intermediate inputs available to all firms, it is the firms in regions with more efficient judiciaries (i.e., the better institutional environment in our paper) that are better able to sign the contracts necessary to access these inputs. In this subsection, we move one step further and investigate the potential role of institutional environment in moderating the effects of input trade liberalisation on firm markups.…”

Section: Institutional Environment Mattersmentioning

confidence: 79%

Input trade liberalisation, institution and markup: Evidence from China's accession to the WTO

Mao

2019

World Economy

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This paper investigates the effects of input trade liberalisation on firm markups and assesses how institutional environment affects such impacts by using Chinese firm‐level data. To identify the causal effects, we exploit the quasi‐natural experiment of China's WTO accession in 2001 and perform difference‐in‐differences estimation. The results show that input tariff liberalisation leads to a substantial increase in firm markups, and institutional environment significantly strengthens such an impact. We further uncover the underlying mechanisms through which input tariff liberalisation boosts firm markups, and show that both price and cost channels work for the input tariff cut effect on firm markups, of which the latter is much more important. In addition, we also demonstrate that input tariff cut significantly fosters aggregate markup growth, and the reallocation effect is found to be an important channel through which input tariff liberalisation boosts aggregate markup growth.

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“…It is well known that the magnitude of the net benefits from liberalizing trade in goods depend on country-specific conditioning factors, including the quality of local governance institutions (Ahsan, 2013;Rodriguez and Rodrik, 2001). It is well known that the magnitude of the net benefits from liberalizing trade in goods depend on country-specific conditioning factors, including the quality of local governance institutions (Ahsan, 2013;Rodriguez and Rodrik, 2001).…”

Section: Regulatory Quality and Benefits Of Services Trade Liberalizamentioning

confidence: 99%

Trade Agreements, Regulatory Institutions and Services Liberalization

Fiorini

Hoekman

2018

Global Policy

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Many agreements to liberalize trade in services tend to be limited in scope. This is a puzzle considering the high share of services in total employment and value added and relatively high barriers to trade in services in many countries. In this paper we argue that neglected complementarities between services trade policies and domestic regulation may help to understand the limited ambition on services observed in many trade agreements. We show that the productivity effects of services trade liberalization are conditional on regulatory quality. Our findings suggest that greater effort to design trade agreements with a view to improving regulatory quality may be a necessary condition for deepening the services coverage of trade agreements and will enhance the welfare gains from services trade liberalization.

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Input tariffs, speed of contract enforcement, and the productivity of firms in India

Cited by 64 publications

References 22 publications

On the relationship between intermediate input imports and export quality in China

On the relationship between intermediate input imports and export quality in China

Input trade liberalisation, institution and markup: Evidence from China's accession to the WTO

Trade Agreements, Regulatory Institutions and Services Liberalization

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