The Role of Firm Factors in Demand, Cost, and Export Market Selection for Chinese Footwear Producers

Mark Roberts, Yi Xu (), Xiaoyan Fan () and Shengxing Zhang

No 17725, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we use micro data on both trade and production for a sample of large Chinese manufacturing firms in the footwear industry from 2002-2006 to estimate an empirical model of export demand, pricing, and market participation by destination market. We use the model to construct indexes of firm-level demand, cost, and export market profitability. The empirical results indicate substantial firm heterogeneity in both the demand and cost dimensions with demand being more dispersed. The firm-specific demand and cost components are very useful in explaining differences in the extensive margin of trade, the length of time a firm exports to a destination, and the number and mix of destinations, as well as the export prices, while cost is more important in explaining the quantity of firm exports on the intensive margin. We use the estimates to analyze the reallocation resulting from removal of the quota on Chinese footwear exports to the EU and find that it led to a rapid restructuring of export supply sources in favor of firms with high demand and low cost indexes.

JEL-codes: F1 L0 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-agr, nep-bec, nep-int and nep-tra
Note: IO ITI PR
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Citations: View citations in EconPapers (35)

Published as Mark J Roberts & Daniel Yi Xu & Xiaoyan Fan & Shengxing Zhang, 2018. "The Role of Firm Factors in Demand, Cost, and Export Market Selection for Chinese Footwear Producers," The Review of Economic Studies, vol 85(4), pages 2429-2461.

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Related works:
Journal Article: The Role of Firm Factors in Demand, Cost, and Export Market Selection for Chinese Footwear Producers (2018)
Working Paper: The role of firm factors in demand, cost, and export market selection for Chinese footwear producers (2018)
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