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Nontariff measures, trade deflection, and market expansion of exporters in China

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  • Xuqian Hu
  • Canfei He

Abstract

This study focuses on the influence of Nontariff Measures (NTMs) on market expansion of exporters using the Chinese custom database during 2003–2011. Besides confirming the negative effect of prior export activity and positive effect of neighboring spillovers, this paper finds robust negative effects of NTMs on entry of new markets at the firm‐market level. The empirical results show that a trade deflection effect exists at the microscale and prefers the markets with lower degree of NTMs. Furthermore, exporters with fewer trade links or in processing trade seem lacking in ability to channel new markets under the pressure of NTMs in their existing markets.

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  • Xuqian Hu & Canfei He, 2020. "Nontariff measures, trade deflection, and market expansion of exporters in China," Growth and Change, Wiley Blackwell, vol. 51(3), pages 932-953, September.
  • Handle: RePEc:bla:growch:v:51:y:2020:i:3:p:932-953
    DOI: 10.1111/grow.12391
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