Outsourcing Tariff Evasion: A New Explanation for Entrepot Trade

Raymond Fisman, Peter Moustakerski and Shang-Jin Wei

No 12818, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Traditional explanations for indirect trade through an entrepot have focused on savings in transport costs and on the role of specialized agents in processing and distribution. We provide an alternative perspective based on the possibility that entrepots may facilitate tariff evasion. Using data on direct exports to mainland China and indirect exports via Hong Kong SAR, we find that the indirect export rate rises with the Chinese tariff rate, even though there is no legal tax advantage to sending goods via Hong Kong SAR. We undertake a number of extensions to rule out plausible alternative hypotheses based on existing explanations for entrepot trade.

JEL-codes: F1 O10 O17 (search for similar items in EconPapers)
Date: 2007-01
New Economics Papers: this item is included in nep-cna, nep-dev, nep-int and nep-sea
Note: ITI LE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Raymond Fisman & Peter Moustakerski & Shang-Jin Wei, 2008. "Outsourcing Tariff Evasion: A New Explanation for Entrepôt Trade," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 587-592, 03.

Downloads: (external link)
http://www.nber.org/papers/w12818.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:12818

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w12818

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().