Trade Liberalisation and Chinese Firm’s Exports: Sourcing from Indonesia

Lili Yan Ing, Wei Tian and Miaojie Yu ()
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Lili Yan Ing: Economic Research Institute for ASEAN and East Asia (ERIA), University of Indonesia
Wei Tian: Peking University
Miaojie Yu: Peking University

A chapter in Input Trade Liberalization in China, 2023, pp 183-204 from Springer

Abstract: Abstract How much can a country expand its exports? It could either export more in terms of the quantity of goods (intensive margins), more in terms of the variety of goods (extensive margins) or move to a higher quality of goods (Hummels and Klenow in Am Econ Rev 95:704–723, 2005). The conventional trade theorem predicts that a country will export goods that use its abundant factor intensively. In the North–South trade framework, this implies that developed countries will export capital-intensive goods, while developing countries will export labour-intensive goods. However, as tariffs decline, trade grows not only between countries with different levels of intensity of factors of production, but also between countries with similar levels. Furthermore, as suggested by Bernard et al. (Am Econ Rev 93:1268–1290, 2003), the increase of North–South trade generates more trade between developing countries as countries in different developing stages engage in different stages of global value chains.

Keywords: Firm performance; Processing trade; Trade liberalisation (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-981-99-7599-0_8

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DOI: 10.1007/978-981-99-7599-0_8

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