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Input Trade Liberalization and Import Switching: Evidence from Chinese Firms

In: Input Trade Liberalization in China

Author

Listed:
  • Wei Tian

    (University of International Business and Economics (UIBE))

  • Miaojie Yu

    (China Center for Economic Research, Peking University)

Abstract

This paper investigates how input liberalization affects firm import behavior. Using comprehensive production and trade data of Chinese firms, the paper shows that firms switch import sources from developing countries to developed countries as Chinese input tariffs fall. This finding is evident for import value and import scope. The observation holds after excluding the possible influence of reducing processing trade. The paper further demonstrates that the mechanism can be attributed to quality upgrading and innovation led by input cost reductions. The analysis handles the possible endogeneity problem, and the findings are robust and significant to different empirical methodologies and measurements.

Suggested Citation

  • Wei Tian & Miaojie Yu, 2023. "Input Trade Liberalization and Import Switching: Evidence from Chinese Firms," Contributions to Economics, in: Input Trade Liberalization in China, pages 161-181, Springer.
    • Handle: RePEc:spr:conchp:978-981-99-7599-0_7
    DOI: 10.1007/978-981-99-7599-0_7
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    More about this item

    Keywords

    F1; F13; F14;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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