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Trade liberalization, input intermediaries and firm productivity: Evidence from China

Defever, F. ORCID: 0000-0001-6462-0522, Imbruno, M. and Kneller, R. (2020). Trade liberalization, input intermediaries and firm productivity: Evidence from China. Journal of International Economics, doi: 10.1016/j.jinteco.2020.103329

Abstract

We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.

Publication Type: Article
Additional Information: © 2020. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords: Firm heterogeneity, Trade liberalization, Intermediate inputs, Productivity, Intermediaries, China
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments: School of Arts & Social Sciences > Economics
Date Deposited: 27 Apr 2020 10:32
URI: https://openaccess.city.ac.uk/id/eprint/24084
[img] Text - Accepted Version
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