This article explores how reductions in tariffs on imported inputs and final goods affect the productivity of large Chinese trading firms, with the special tariff treatment that processing firms receive on imported inputs. Firm-level input and output tariffs are constructed. Both types of tariff reductions have positive impacts on productivity that are weaker as firms' share of processing imports grows. The impact of input tariff reductions on productivity improvement, overall, is weaker than that of output tariff reductions, although the opposite is true for non-processing firms only. Both tariff reductions are found to contribute at least 14.5% to economy-wide productivity growth.

This paper examines why credit constraints for domestic and exporting firms arise in a setting where banks do not observe firms' productivities. To maintain incentive-compatibility, banks lend below the amount needed for first-best production. The longer time needed for export shipments induces a tighter credit constraint on exporters than on purely domestic firms, even in the exporters' home market. Greater risk faced by exporters also affects the credit extended by banks. Extra fixed costs reduce exports on the extensive margin, but can be offset by collateral held by exporting firms. The empirical application to Chinese firms strongly supports these theoretical results, and we find a sizable impact of the financial crisis in reducing exports.

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A variety of methods can be used to compile a life cycle inventory (LCI) as part of a life cycle assessment (LCA) study. Hybrid LCI methods attempt to address the limitations inherent in more traditional process and input-output (IO) LCI methods. This paper provides an overview of the different hybrid LCI methods currently in use in an attempt to provide greater clarity around how each method is applied and their specific strengths and weaknesses. A search of publications quoting the use of hybrid LCI was undertaken for the period from 2010 to 2015, identifying 97 peer-reviewed publications referencing the use of a hybrid LCI. In over one third of the literature analysed, authors only refer to their analysis as a hybrid LCI, without naming the actual method used, making it difficult to fully understand the method used and any potential limitations. Based on the way in which the various hybrid methods are applied and their existing use, the authors propose a set of clear definitions for existing hybrid LCI methods. This assists in creating a better understanding of, 2 and confidence in applying hybrid LCI methods amongst LCA practitioners, potentially leading to a greater uptake of hybrid LCI. KeywordsLife cycle assessment; life cycle inventory analysis; input-output analysis; process analysis; hybrid analysis.

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M. (2017) Does outward FDI generate higher productivity for emerging economy MNEs? -micro-level evidence from Chinese manufacturing firms. International Business Review 26 (5), pp. 839-854.

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In this paper, we study the impact of consumer-generated quality information (e.g., consumer reviews) on a firm’s dynamic pricing strategy in the presence of strategic consumers. Such information is useful, not only to the consumers that have not yet purchased the product but also to the firm. The informativeness of the consumer-generated quality information depends, however, on the volume of consumers who share their opinions and, thus, depends on the initial sales volume. Hence, via its initial price, the firm not only influences its revenue but also controls the quality information flow over time. The firm may either enhance or dampen the quality information flow via increasing or decreasing initial sales. The corresponding pricing strategy to steer the quality information flow is not always intuitive. Compared to the case without consumer-generated quality information, the firm may reduce the initial sales and lower the initial price. Interestingly, the firm may get strictly worse off due to the consumer-generated quality information. Even when the firm benefits from consumer-generated quality information, it may prefer less accurate information. Consumer surplus can also decrease due to the consumer-generated quality information, contrary to the conventional wisdom that word of mouth should help consumers. We examine extensions of our model that incorporate capacity investment, firm’s private information about quality, alternative updating mechanisms, as well as multiple sales periods, and show that our insights are robust. This paper was accepted by Yossi Aviv, operations management.