Input Trade Liberalization and Export Product Scope: Evidence from China

Chunming Zhao () and Qun Zhang ()

Business and Economic Research, 2016, vol. 6, issue 2, 118-132

Abstract: This paper explores the impact of input trade liberalization on export product scope of firms in industries with different scope for product differentiation. Firm- and industry-specific tariffs are measured to reflect cost effect (intensive margin) and new input effect (extensive margin) of input tariff reductions. Using tariff data and product-level trade data for 2002-2006, we find that while firms in differentiated product scope expand export product lines greatly, firms in non-differentiated product sector do not expand export product scope significantly, which is robust to different definitions of varieties.

Keywords: Input trade liberalization; Product scope; Scope for product differentiation (search for similar items in EconPapers)
Date: 2016
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