Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters

Amit Khandelwal, Peter K. Schott and Shang-Jin Wei

No 17524, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: If trade barriers are managed by inefficient institutions, trade liberalization can lead to greater-than-expected gains. We examine Chinese textile and clothing exports before and after the elimination of externally imposed export quotas. We find that the surge in export value and decline in export prices following quota removal is driven by net entry, and show that this dominance is inconsistent with use of a productivity-based allocation of quota licenses by the Chinese government. Our counterfactual implies that elimination of misallocated quotas raised the overall productivity gain of quota removal by 28 percent.

JEL-codes: F1 O1 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-cis, nep-cna, nep-cwa and nep-int
Note: ITI
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Citations: View citations in EconPapers (16)

Published as Amit K. Khandelwal & Peter K. Schott & Shang-Jin Wei, 2013. "Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters," American Economic Review, American Economic Association, vol. 103(6), pages 2169-95, October.

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Journal Article: Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters (2013)
Working Paper: Trade liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters (2012)
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