Chinese networks and tariff evasion
AbstractIn this paper we combine the tariff evasion analysis of Fisman and Wei (2004) with Rauch and Trindade’s (2002) study of Chinese trade networks. Chinese networks are known to act as trade catalysts by enforcing contracts and providing market information. As tariff evasion occurs outside the law, market information is scant and formal institutions inexistent, rendering networks the more important. We find robust evidence that Chinese networks, proxied by ethnic Chinese migrant populations, increase tariff evasion, i.e. the tariff semi-elasticity of Chinese missing imports. We suggest the effects takes place through matching of illicit-minded traders, identification of corrupt customs agents and enforcement of informal contracts.
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Bibliographic InfoPaper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 20-2010.
Length: 7733 words
Date of creation: Nov 2010
Date of revision: Nov 2010
tariff evasion; China; illicit trade; migrant networks;
Other versions of this item:
- F1 - International Economics - - Trade
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-27 (All new papers)
- NEP-MIG-2010-11-27 (Economics of Human Migration)
- NEP-NET-2010-11-27 (Network Economics)
- NEP-SOC-2010-11-27 (Social Norms & Social Capital)
- NEP-TRA-2010-11-27 (Transition Economics)
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