Trade liberalization and Firms’ export performance in China: Theory and evidence

Fan, Haichao; Lai, Edwin L.-C.; Qi, Han

doi:10.1016/j.jce.2019.05.001

Cited by 35 publications

(19 citation statements)

References 28 publications

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“…Evidence for Italy has been provided by Castellani et al (2010) and LoTurco and Maggioni (2013). Other papers look at the connection between the two trade activities by investigating the effect of input-trade liberalization on firm export outcomes (Bas 2012, Bas and Strauss-Kahn 2015, Fan et al 2016, Chevassus-Lozza et al 2013.…”

Section: Introductionmentioning

confidence: 99%

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The role of the gravity forces on firms’ trade

Navas

Serti

Tomasi

2020

Canadian J of Economics

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. This paper offers both a theoretical framework and empirical evidence on the role that the two gravity forces, namely market size and geographical distance, have indirectly through imports, on firms’ exports patterns. The model shows that sourcing from bigger and closer markets implies higher productivity gains that, in turn, increase firms’ ability to enter export market as well as their export value. Exploiting data on product‐ and destination‐level transactions of a large panel of Italian firms, the paper shows that, on average, the indirect effects of the gravity forces are about one third of their direct effects. Résumé. Rôle des forces de gravité sur le commerce des entreprises. Cet article offre à la fois un cadre théorique et des preuves empiriques sur le rôle que deux forces de gravité, à savoir la taille du marché et l’éloignement géographique, peuvent indirectement exercer sur les profils d’exportation des entreprise en fonction de leurs importations. Ce modèle montre que l’approvisionnement sur des marchés plus vastes et plus proches engendre de meilleurs gains de productivité, augmentant ainsi la capacité des entreprises à intégrer le marché d’exportation ainsi que la valeur de leurs exportations. En s’appuyant sur des données provenant d’un large panel d’entreprises italiennes et relatives aux transactions par type de produit et par destination, cet article montre qu’en moyenne, les effets indirects des forces de gravité représentent environ un tiers de leurs effets directs.

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Section: Introductionmentioning

confidence: 99%

“…Other papers look at the connection between the two trade activities by investigating the effect of input‐trade liberalization on firm export outcomes (Bas , Bas and Strauss‐Kahn , Fan et al. , Chevassus‐Lozza et al. ).…”

Section: Introductionmentioning

confidence: 99%

The role of the gravity forces on firms’ trade

Navas

Serti

Tomasi

2020

Canadian J of Economics

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“…With regard to the internal characteristics and resources in most of the studies, firm size and export experience (Chen et al, 2016;Fan et al, 2019;Sousa et al, 2008) are usually iden-tified as positive determinants of export performance. The main support for this result is that larger, experienced firms have more available resources, taking advantage of scale economies and benefiting from higher market power (Chen et al, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

Firms’ Export Performance: A Fractional Econometric Approach

Faria

Rebelo

Gouveia

2020

Journal of Business Economics and Management

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Export activities have become crucial to firms’ competitiveness, with determinants of export performance being a challenging field of research, since there is no consensus regarding the explained and explanatory variables or on the econometric methods to be used. Using a panel data of Portuguese wine firms, this paper aims to contribute to this debate, combining both resource- and institutional-based views of the firm. This paper tries to overcome the methodological hurdle, addressing sample selection issues and considering the fractional response nature of export performance. Given the pros and cons of each econometric approach, the Heckman selection model, the fractional probit model and the two-part fractional response model are estimated, and the results compared. From a public policy perspective, the results show that policies that promote wine firm size, labor productivity and wine promotion in third countries have a positive impact on export performance at firm-level. Age does not appear as a key factor on the internationalization of Portuguese wine firms

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“…Fan et al. (2019) find that China's trade liberalization, which mainly led to unilateral import tariff cut on both final goods and intermediate inputs, have opposite effects on firms’ exporting behaviors. Chandra and Long (2013) find that value‐added tax (VAT) rebate rates have large effect on export volume.…”

Section: Introductionmentioning

confidence: 99%

Does value‐added tax reform boost firms’ domestic value added in exports? Evidence from China

2021

Rev International Economics

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We explore the effect of value‐added tax (VAT) on domestic value added in exports where VAT is incorporated into a theoretical model to analyze its distortion on intra‐firm resource allocation. The VAT pilot reform in the three northeast provinces of China in 2004 provided a natural experiment which generated significant effective VAT rate differences due to deduction policies. We utilize the reform as an exogenous shock to identify its effect on the domestic value added ratio (DVAR) in exports at the firm level. Empirical results show that the reform has significantly increased the firms' DVAR by allowing more deduction of fixed asset purchases that lowers the effective VAT rates of the affected firms, which confirm the findings of our conceptual framework. This effect is greater for large and medium‐sized firms than for small and microscale firms. The VAT reform in 2004 has significant effect on the DVAR of state‐owned enterprises and domestic private firms, but not for foreign invested firms. The reform also has higher effect for firms from higher market concentration sectors.

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Trade liberalization and Firms’ export performance in China: Theory and evidence

Cited by 35 publications

References 28 publications

The role of the gravity forces on firms’ trade

The role of the gravity forces on firms’ trade

Firms’ Export Performance: A Fractional Econometric Approach

Does value‐added tax reform boost firms’ domestic value added in exports? Evidence from China

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