Input Trade Liberalization and the Export Duration of Products: Evidence from China

Zhou, Dinggen; Yang, Jingjing; Lai, Mingyong

doi:10.1111/cwe.12305

Cited by 12 publications

(5 citation statements)

References 48 publications

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“…Import tariffs on intermediate goods can impact the domestic manufacturing industry, influencing investment, GDP growth, and consumer welfare (Kreuter & Riccaboni, 2023). Liberalizing tariffs on input commodities has been shown to enhance the export duration of manufactured commodities (Zhou et al., 2019), supporting the Lerner symmetry theorem, which posits that policies encouraging imports also encourage exports (Costinot & Werning, 2019; Linde & Pescatori, 2019).…”

Section: Literature Reviewmentioning

confidence: 94%

Impact of tariff liberalization on economic and social benefits: Computable general equilibrium application to Kenya

Mwatu,

Nafula,

Karanja

2024

Politics & Policy

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This study employed computable general equilibrium policy simulations to examine the impact of import tariff liberalization on socioeconomic outcomes including living standards, cost of living, gross domestic product (GDP) from expenditure, total investment expenditure, intermediate input demand, output, value‐added, tariff revenue, sales tax revenue, indirect tax revenue, direct income tax revenue, factor income tax revenue, and factor demand. Findings from the simulations have policy implications touching on a need to embrace reciprocal tariff liberalization under agreements like strategic trade and investment partnerships and economic partnership agreements as they are associated with welfare gains, reduction in cost of living, and GDP growth. Targeted policy incentives could be directed to specific domestic sectors since tariff liberalization has negative impacts on investment expenditure. Incentives regarding intermediate inputs should be directed to the manufacturing and services sectors for liberalization of agrifood commodities. Targeted policy incentives should be directed to the manufacturing and services sectors which experience decrease in output with tariff reductions. Liberalization of manufactured commodities should be accompanied by value‐added incentives directed to the agrifood and home production–home consumption sectors. For the liberalization of manufactured commodities, targeted policy incentives should be directed to the services sector which experiences job losses while for the liberalization of tariffs on imports of agrifood commodities, targeted policy incentives should be directed to the agrifood and the home production–home consumption sectors, which also lose jobs. These targeted policy incentives could support industrial activity and compensate for revenue loss, especially from customs duties.Related ArticlesGruber, Lloyd. 2013. “Trade, Growth, Poverty, and Politics: Toward a Unified Theory.” Politics & Policy 41(5): 723–64. https://doi.org/10.1111/polp.12034.Onyango, Gedion, and Japheth Otieno Ondiek. 2022. “Open Innovation During the COVID‐19 Pandemic Policy Responses in South Africa and Kenya.” Politics & Policy 50(5): 1008–31. https://doi.org/10.1111/polp.12490.Soto, Gloria. 2012. “Environmental Impact of Agricultural Trade Liberalization under NAFTA.” Politics & Policy 40(3): 471–91. https://doi.org/10.1111/j.1747‐1346.2012.00354.x.

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Section: Literature Reviewmentioning

confidence: 94%

Impact of tariff liberalization on economic and social benefits: Computable general equilibrium application to Kenya

Mwatu,

Nafula,

Karanja

2024

Politics & Policy

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“…The dependent variable lnY it represents regional economic growth, measured as the logarithm of real GDP per capita (at constant prices); GVC it represents GVC upgrading; Z jit represents the other control variables; α 1 and γ j represent regression coefficients; µ i represents city fixed effects (FE); and ε it represents the random error term. The technical complexity of exports can be measured at the product-specific level by using trade data and the income level of the exporting country, without requiring data on the R&D input of specific products and industries [67]. Due to this advantage, the export technical complexity index has been widely used in the study of GVC status at the country, regional, industry and even enterprise levels.…”

Section: Empirical Models and Data Processing 41 Empirical Modelsmentioning

confidence: 99%

Can Global Value Chain Upgrading Promote Regional Economic Growth? Empirical Evidence and Mechanism Analysis Based on City-Level Panel Data in China

2023

Sustainability

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Since launching its reforms and opening up, China has actively integrated itself into global value chains (GVCs) and experienced continuous growth. However, there exists a significant imbalance between GVC upgrading and economic growth across regions in China. Can GVC upgrading promote economic growth at the regional level? Despite the theoretical foundations and empirical evidence provided at the national level, research on GVC upgrading at the subnational level remains limited. This study constructs a temporal indicator to measure GVC upgrading at the finest subnational level, including cities at the prefecture level and above, and employs panel fixed effects (FE) and mediation models to examine the impact and mechanism of GVC upgrading on regional economic growth, aiming for a meaningful exploration in this area. The results show that GVC upgrading has a significant positive effect on regional economic growth with robust performance. Specifically, a 1-standard-deviation improvement in GVC upgrading leads to a 0.054-standard-deviation increase in the logarithm of per capita gross domestic product (GDP). Heterogeneity analysis shows that the promotion effect is more pronounced in coastal areas and administrative centers. Mechanism analysis indicates that GVC upgrading promotes regional economic growth by facilitating capital accumulation, promoting technological progress, and enhancing human resources, among which, facilitating capital accumulation plays the most significant role, accounting for over 70% of the economic growth effects associated with GVC upgrading. Thus, China should create an enabling environment for promoting GVC upgrading, enhance capital accumulation, foster regional innovation systems, improve the quality of human capital, and promote domestic market integration.

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“…Previous research has shown that R&D, fi xed-asset investments, and human capital are valuable resources to improve fi rm productivity (e.g. Zhou et al, 2019;Aw et al, 2008;Chowdhury et al, 2014;Wang, 2020). Thus, the increased longterm investments would enhance fi rms' competitiveness.…”

Section: Development Of Hypothesesmentioning

confidence: 99%

Housing Market Speculation and Firm Productivity: Evidence from China

Chen

Feng

2021

China and World Economy

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An appreciation in the price of housing could generate speculation opportunities for enterprises. Many firms try to seize these opportunities for quick returns. This may harm their productivity. We use the real estate boom and the investment activities of Chinese manufacturing firms during 2006–2017 to examine the processes and the net effect of housing market speculation on firm productivity. We find that housing market speculation negatively affects firm productivity by crowding out investments in research and development and productive fixed assets, and the positive effect brought about by a strengthened balance sheet and better financing capacity is outweighed by the crowding‐out effect. This negative impact is more evident in state‐owned firms, but is mitigated in regions and periods with better business environments. Set in the overheated housing market in China, our study contributes to the existing literature by exploring how firms’ investments outside of their main business influence firm behavior and productivity.

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Input Trade Liberalization and the Export Duration of Products: Evidence from China

Cited by 12 publications

References 48 publications

Impact of tariff liberalization on economic and social benefits: Computable general equilibrium application to Kenya

Impact of tariff liberalization on economic and social benefits: Computable general equilibrium application to Kenya

Can Global Value Chain Upgrading Promote Regional Economic Growth? Empirical Evidence and Mechanism Analysis Based on City-Level Panel Data in China

Housing Market Speculation and Firm Productivity: Evidence from China

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