Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Value of Information in International Trade: Gains to Outsourcing through Hong Kong

Contents:

Author Info

  • Feenstra Robert C

    ()
    (University of California. Davis and National Bureau of Economic Research)

  • Hanson Gordon H.

    ()
    (University of California, San Diego, and National Bureau of Economic Research)

  • Lin Songhua

    ()
    (Denison University)

Abstract

In this paper, we estimate the benefits to countries that purchase goods from China by having access to intermediary services provided in Hong Kong. Traders in Hong Kong supply information on markets and producers in China, which provides welfare gains to foreign firms using these services. During the 1990s, Hong Kong intermediated about one-half of the goods that China exported to the rest of the world. Using constant elasticity demand curves, we find that the gains to intermediary services provided by Hong Kong are roughly equal to the value of these Hong Kong re-exports, and four to five times larger than the markups earned in Hong Kong. Using a linear approximation to the demand curves instead, we find that the gains are one-quarter as much as the value of re-exports, or slightly larger than the markups.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.degruyter.com/view/j/bejeap.2004.4.issue-1/bejeap.2004.4.1.1071/bejeap.2004.4.1.1071.xml?format=INT
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 4 (2004)
Issue (Month): 1 (August)
Pages: 1-37

as in new window
Handle: RePEc:bpj:bejeap:v:advances.4:y:2004:i:1:n:7

Contact details of provider:
Web page: http://www.degruyter.com

Order Information:
Web: http://www.degruyter.com/view/j/bejeap

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Alessandra Casella & James E. Rauch, 1997. "Anonymous Market and Group Ties in International Trade," NBER Working Papers 6186, National Bureau of Economic Research, Inc.
  2. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  3. Grossman, G.M. & Helpman, E., 2002. "Outsourcing in a Global Economy," Papers 218, Princeton, Woodrow Wilson School - Public and International Affairs.
  4. Rauch, J E & Watson, Joel, 2001. "Entrepreneurship in International Trade," University of California at San Diego, Economics Working Paper Series qt1qx2x540, Department of Economics, UC San Diego.
  5. James E. Rauch & Vitor Trindade, 2000. "Information and Globalization: Wage Co-Movements, Labor Demand Elasticity, and Conventional Trade Liberalization," NBER Working Papers 7671, National Bureau of Economic Research, Inc.
  6. Wan, Henry Y, Jr & Weisman, Jason, 1999. "Hong Kong: The Fragile Economy of Middlemen," Review of International Economics, Wiley Blackwell, vol. 7(3), pages 410-30, August.
  7. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
  8. Robert C. Feenstra & Gordon H. Hanson, 2004. "Intermediaries in Entrepot Trade: Hong Kong Re-Exports of Chinese Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(1), pages 3-35, 03.
  9. Gene M. Grossman & Elhanan Helpman, 2002. "Integration Versus Outsourcing In Industry Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 85-120, February.
  10. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
  11. Rauch, J E & Casella, Alessandra, 2001. "Overcoming Informational Barriers to International Resource Allocation: Prices and Ties," University of California at San Diego, Economics Working Paper Series qt2k8626fr, Department of Economics, UC San Diego.
  12. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
  13. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-16, May.
  14. Barry Naughton, 1996. "China's Emergence and Prospects as a Trading Nation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 273-344.
  15. Robert C. Feenstra, 1999. "Discrepancies in International Data: An Application to China-Hong Kong Entrepot Trade," American Economic Review, American Economic Association, vol. 89(2), pages 338-343, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Bruce A. Blonigen & Alyson C. Ma, 2010. "Please Pass the Catch-Up: The Relative Performance of Chinese and Foreign Firms in Chinese Exports," NBER Chapters, in: China's Growing Role in World Trade, pages 475-509 National Bureau of Economic Research, Inc.
  2. Alessandro Nicita & Marcelo Olarreaga, 2007. "Information and Export Performance," Journal of Industry, Competition and Trade, Springer, vol. 7(2), pages 95-111, June.
  3. Alyson C. Ma & Ari Van Assche & Chang Hong, 2010. "Global Production Networks and the People’s Republic of China’s Processing Trade," Working Papers id:3041, eSocialSciences.
  4. Lars Calmfors & Giancarlo Corsetti & John Kay & Seppo Honkapohja & Willi Leibfritz & Gilles Saint-Paul & Hans-Werner Sinn & Xavier Vives, 2005. "Chapter 2: Outsourcing," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 39-50, 03.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:advances.4:y:2004:i:1:n:7. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.