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Growing Like China: Firm Performance and Global Production Line Position

Davin Chor (), Kalina Manova and Zhihong Yu ()

No 15225, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.

Keywords: China; Firm Heterogeneity; firm lifecycle; global value chains; Production line position; Upstreamness (search for similar items in EconPapers)
JEL-codes: F10 F14 F23 L23 L24 L25 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-bec, nep-eff and nep-int
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Journal Article: Growing like China: Firm performance and global production line position (2021) Downloads
Chapter: Growing like China: Firm Performance and Global Production Line Position (2020)
Working Paper: Growing like China: firm performance and global production line position (2020) Downloads
Working Paper: Growing Like China: Firm Performance and Global Production Line Position (2020) Downloads
Working Paper: Growing like China: firm performance and global production line position (2020) Downloads
Working Paper: Growing Like China: Firm Performance and Global Production Line Position (2020) Downloads
Working Paper: Growing like China: Firm performance and global production line position (2020) Downloads
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