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Trade between China and the Netherlands: a Case Study of Globalization

Author

Listed:
  • Frank A.G. den Butter

    () (VU University Amsterdam)

  • Raphie Hayat

    (KPMG Corporate Finance, Amsterdam)

Abstract

See also F.A.G. den Butter, R. Hayat (2013), Trade between China and the Netherlands: a case study of trade in tasks, Journal of Chinese Economic and Foreign Trade Studies , 6(3), 178-191. During the last decades, the growth of trade between China and the Netherlands has been larger than the increase in bilateral trade flows between China and most other countries. Using a time series based gravity model, this paper investigates the main determinants of this increase. The empirical analysis indicates that, apart from GDP growth, Dutch in-house offshoring to China is a major determinant of Dutch import growth from China. Dutch firms tend to offshore production in-house when the asset specificity of the traded inputs is high and offshore via the market when this asset specificity is low. Controlling for these product types also reveals that transport costs are more important for trade in homogeneous and reference priced goods than for trade in differentiated goods

Suggested Citation

  • Frank A.G. den Butter & Raphie Hayat, 0000. "Trade between China and the Netherlands: a Case Study of Globalization," Tinbergen Institute Discussion Papers 08-016/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20080016
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    Cited by:

    1. repec:bla:sajeco:v:85:y:2017:i:3:p:430-454 is not listed on IDEAS
    2. Mustafa Çakir & Alain Kabundi, 2014. "Working Paper – WP/14/05- Transmission of China’s Shocks to the BRIS Countries," Working Papers 6345, South African Reserve Bank.
    3. Frank A.G. den Butter, 2010. "Transaction Management: Value Creation by Reducing Transaction Costs," Tinbergen Institute Discussion Papers 10-051/3, Tinbergen Institute.
    4. Mustafa Çakir & Alain Kabundi, 2017. "Transmission of China's Shocks to the BRIS Countries," South African Journal of Economics, Economic Society of South Africa, vol. 85(3), pages 430-454, September.

    More about this item

    Keywords

    international trade; transaction costs; offshoring; foreign direct investments; asset specificity; gravity model;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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