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Global Value Chains and Trade Elasticities

  • Byron S. Gangnes

    (UHERO, University of Hawaii at Manoa)

  • Alyson C. Ma

    (University of San Diego)

  • Ari Van Assche

    ()

    (HEC Montréal, Department of International Business)

Previous studies have argued that global value chains (GVCs) have increased the sensitivity of trade to external business cycle shocks. This may occur either because GVC trade is concentrated in durable goods industries, which are known to have high income elasticities (a composition effect), or because, within industries, GVC trade has a higher income elasticity than regular trade (a supply chain effect). Using Chinese trade data across customs regimes and industries during the period 1995-2009, we find evidence for the former, but not the latter.

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File URL: http://www.uhero.hawaii.edu/assets/WP_2014-2.pdf
File Function: First version, 2014
Download Restriction: no

Paper provided by University of Hawaii Economic Research Organization, University of Hawaii at Manoa in its series Working Papers with number 2014-2.

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Length: 10 pages
Date of creation: Feb 2014
Date of revision:
Handle: RePEc:hae:wpaper:2014-2
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  1. Cheung, Yin-Wong & Chinn, Menzie D. & Qian, XingWang, 2012. "Are Chinese trade flows different?," Journal of International Money and Finance, Elsevier, vol. 31(8), pages 2127-2146.
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  12. Willem Thorbecke & Gordon Smith, 2010. "How Would an Appreciation of the Renminbi and Other East Asian Currencies Affect China's Exports?," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 95-108, 02.
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