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Export volatility with trade policy uncertainty: Evidence from China

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  • Xiaoping Chen
  • Xiaotao Zhao

Abstract

This paper studies the effect of trade policy uncertainty on firm‐level export volatility. Using data on Chinese exporters around China's WTO accession, we find that a reduction of trade policy uncertainty between China and the United States decreases the volatility of firm‐level export to the United States and increases the volatility of export to the rest of the world. In the aggregate firm level, this shock in trade policy uncertainty has no significant effect on the volatility of total export or the volatility of total sales. Our finding suggests a risk‐sharing effect among export destinations.

Suggested Citation

  • Xiaoping Chen & Xiaotao Zhao, 2021. "Export volatility with trade policy uncertainty: Evidence from China," The World Economy, Wiley Blackwell, vol. 44(12), pages 3534-3549, December.
    • Handle: RePEc:bla:worlde:v:44:y:2021:i:12:p:3534-3549
    DOI: 10.1111/twec.13128
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    References listed on IDEAS

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    Cited by:

    1. Zhou, Fengxiu & Wen, Huwei, 2022. "Trade policy uncertainty, development strategy, and export behavior: Evidence from listed industrial companies in China," Journal of Asian Economics, Elsevier, vol. 82(C).
    2. Bao, Xiaohua & Deng, Jianpeng & Sun, Haoyu & Sun, Jin, 2022. "Trade policy uncertainty and foreign direct investment: Evidence from China’s WTO accession," Journal of International Money and Finance, Elsevier, vol. 125(C).
    3. Yu, Mingzhe & Fan, Jiachuan & Wang, Haijun & Wang, Jie, 2023. "US trade policy uncertainty on Chinese agricultural imports and exports: An aggregate and product-level analysis," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 70-83.
    4. Muhammad Nadir Shabbir & Wang Liyong & Muhammad Usman Arshad, 2022. "Trade Policy Uncertainty and Medical Innovation: Evidence from Developing Nations," Economies, MDPI, vol. 10(9), pages 1-23, September.
    5. Ruxu Zhang & Yahui Qu, 2022. "The Impact of U.S. Trade Policy Uncertainty on the Trade Margins of China’s Export to the U.S," Sustainability, MDPI, vol. 14(22), pages 1-16, November.

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