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Productivity Gains from Trade: Bunching Estimates from Trading Rights in China

Author

Listed:
  • Yunong Li

    (Southwestern University of Finance and Economics)

  • Yi Lu

    (Tsinghua University)

  • Jianguo Wang

    (Renmin University of China)

Abstract

This paper identifies productivity gains from trade by studying the manipulation behavior of firms in response to regulatory policies on international trade in China. Bunching estimates show that participation in international trade increases firm productivity. The productivity gains increase over time, indicating dynamic learning from trading. Further exploration shows no effects on R&D investment, product rationalization, and markup. Young firms and nonstate-owned firms (non-SOEs) gain more from participating in trade. Workers share productivity gains through increased wages but not from increased employment.

Suggested Citation

  • Yunong Li & Yi Lu & Jianguo Wang, 2025. "Productivity Gains from Trade: Bunching Estimates from Trading Rights in China," The Review of Economics and Statistics, MIT Press, vol. 107(5), pages 1275-1290, September.
    • Handle: RePEc:tpr:restat:v:107:y:2025:i:5:p:1275-1290
    DOI: 10.1162/rest_a_01392
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