IDEAS home Printed from https://ideas.repec.org/a/eee/jimfin/v138y2023ics0261560623001420.html
   My bibliography  Save this article

Access to overseas information and domestic value added: Evidence from China

Author

Listed:
  • Liu, Shasha
  • Jin, Yifan
  • Kong, Dongmin

Abstract

This study identifies information accessibility as a determinant of domestic value added (DVA). To establish causality, we use the sudden termination of Google’s search services in China to conduct a difference-in-differences estimation. Given that ordinary trades rely more on foreign market information than processing trades, we classify firms with high (low) ordinary trade exports as treatment (control) group and show that Google’s exit has a significant and persistent negative impact on DVA for treated firms. Our findings are more pronounced for firms in industries dominated by foreign technology and firms with more types of goods or higher capital intensity. The alternative access to foreign sources can weaken the impact of Google’s exit. Three underlying mechanisms associated with the falling accessibility of foreign information are the downward export growth, the rising costs of overseas intermediate inputs, and the decreasing innovation. Overall, this study enriches our understanding of a fundamental but neglected factor in driving DVA.

Suggested Citation

  • Liu, Shasha & Jin, Yifan & Kong, Dongmin, 2023. "Access to overseas information and domestic value added: Evidence from China," Journal of International Money and Finance, Elsevier, vol. 138(C).
  • Handle: RePEc:eee:jimfin:v:138:y:2023:i:c:s0261560623001420
    DOI: 10.1016/j.jimonfin.2023.102941
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0261560623001420
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jimonfin.2023.102941?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Yuxiang & Zhang, Jiewei & Dai, Yue, 2023. "Analyst following and greenwashing decision," Finance Research Letters, Elsevier, vol. 58(PC).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jimfin:v:138:y:2023:i:c:s0261560623001420. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30443 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.