Trade between China and the Netherlands: a Case Study of Globalization

Frank Den Butter () and Raphie Hayat
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Raphie Hayat: KPMG Corporate Finance, Amsterdam

No 08-016/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: See also F.A.G. den Butter, R. Hayat (2013), Trade between China and the Netherlands: a case study of trade in tasks, Journal of Chinese Economic and Foreign Trade Studies , 6(3), 178-191.

During the last decades, the growth of trade between China and the Netherlands has been larger than the increase in bilateral trade flows between China and most other countries. Using a time series based gravity model, this paper investigates the main determinants of this increase. The empirical analysis indicates that, apart from GDP growth, Dutch in-house offshoring to China is a major determinant of Dutch import growth from China. Dutch firms tend to offshore production in-house when the asset specificity of the traded inputs is high and offshore via the market when this asset specificity is low. Controlling for these product types also reveals that transport costs are more important for trade in homogeneous and reference priced goods than for trade in differentiated goods

Keywords: international trade; transaction costs; offshoring; foreign direct investments; asset specificity; gravity model (search for similar items in EconPapers)
JEL-codes: F14 L16 L23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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