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Input-Trade Liberalization, Export Prices and Quality Upgrading

Author

Listed:
  • Maria Bas

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, Sciences Po - Sciences Po)

  • Vanessa Strauss-Kahn

    (ESCP-EAP - ESCP-EAP - Ecole Supérieure de Commerce de Paris)

Abstract

This paper explores the impact of input-trade liberalization on imported input and exported product prices. Using Chinese transaction data for 2000-2006, we capture causal effects between exogenous input tarif reductions and within firm changes in HS6 traded product prices. Identifcation is based on a quasi-natural experiment where some forms are exempt from paying tariffs and stand as a control group. Both imported input and export prices rise. The effect on export prices is specific to forms sourcing inputs from developed economies and exporting output to high-income countries. Results are consistent with a scenario within which forms exploit the input tariff cuts to access high-quality inputs in order to quality-upgrade their exports.

Suggested Citation

  • Maria Bas & Vanessa Strauss-Kahn, 2013. "Input-Trade Liberalization, Export Prices and Quality Upgrading," Working Papers hal-03460775, HAL.
    • Handle: RePEc:hal:wpaper:hal-03460775
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03460775
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    More about this item

    Keywords

    Firm heterogeneity; imported inputs; trade liberatization; export prices; quality upgrade; mark-up;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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