 Tariff evasion in machinery production networks: Evidence from East AsiaEconomic Modelling, 2018, vol. 70, issue C, 115-126 Abstract: We estimate the effects of tariff rates on bilateral tariff evasion in international production networks, namely parts and components and final products, focusing on intra-regional trade in East Asia during 1996–2011. Our results reveal that tariff evasion is prevalent in 7 of the 12 East Asian countries studied, particularly in non-high-income importers. Specifically, the tariff evasion of parts and components increases by 1.10%–1.55% compared with that of final products (0.55%–0.96%), with a one-percentage-point increase in the tariff rate. Moreover, the responsiveness of the unit price gap to the tariff level is greater for parts and components than for final products. Finally, we investigate the nonlinear issue and tariff evasion of the misclassification of imported products and obtain robust results. Our findings provide relevant economic implications for policy makers regarding the severity of tariff evasion because machinery production networks are crucial factors driving intra-regional trade in East Asia. Keywords: International production networks; Machinery industry; Tariff evasion; Asian fragmentation; Parts and components (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:70:y:2018:i:c:p:115-126 DOI: 10.1016/j.econmod.2017.10.017 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.