Trade liberalization, input intermediaries and firm productivity: evidence from China

Fabrice Defever, Michele Imbruno and Richard Kneller

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.

Keywords: firm heterogeneity; trade liberalization; intermediate inputs; productivity; intermediaries; china (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2019-12-10
New Economics Papers: this item is included in nep-cna, nep-eff and nep-int
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Downloads: (external link)
http://eprints.lse.ac.uk/103453/ Open access version. (application/pdf)

Related works:
Journal Article: Trade liberalization, input intermediaries and firm productivity: Evidence from China (2020)
Working Paper: Trade liberalization, input intermediaries and firm productivity: Evidence from China (2020)
Working Paper: Trade liberalization, input intermediaries and firm productivity: evidence from China (2019)
Working Paper: Trade Liberalization, Input Intermediaries and Firm Productivity: Evidence from China (2019)
Working Paper: Trade Liberalization, Input Intermediaries and Firm Productivity: Evidence from China (2019)
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