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Chinese networks and tariff evasion

Pierre-Louis Vézina () and Lorenzo Rotunno ()

No 20-2010, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: In this paper we combine the tariff evasion analysis of Fisman and Wei (2004) with Rauch and Trindade’s (2002) study of Chinese trade networks. Chinese networks are known to act as trade catalysts by enforcing contracts and providing market information. As tariff evasion occurs outside the law, market information is scant and formal institutions inexistent, rendering networks the more important. We find robust evidence that Chinese networks, proxied by ethnic Chinese migrant populations, increase tariff evasion, i.e. the tariff semi-elasticity of Chinese missing imports. We suggest the effects takes place through matching of illicit-minded traders, identification of corrupt customs agents and enforcement of informal contracts.

Keywords: tariff evasion; China; illicit trade; migrant networks (search for similar items in EconPapers)
JEL-codes: F1 K42 (search for similar items in EconPapers)
Pages: 7733 words
Date: 2010-11, Revised 2010-11
New Economics Papers: this item is included in nep-int, nep-mig, nep-net, nep-soc and nep-tra
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Journal Article: Chinese Networks and Tariff Evasion (2012) Downloads
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