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Abstract:
This paper uses newly available data on Chinese trade flows to establish novel and confirm existing stylized facts about firm heterogeneity in trade. First, the bulk of exports and imports are captured by a few multi‐product firms that transact with a large number of countries. Second, the average importer imports more products than the average exporter exports, but exporters trade with more countries than importers do. Third, compared to private domestic firms, foreign affiliates and joint ventures trade more and import more products from more source countries, but export fewer products to fewer destinations. Fourth, the relationship between firms’ intensive and extensive margin of trade is non-monotonic, differs between exporters and importers, and depends on the ownership structure of the firm. Fifth, firms frequently exit and re-enter into trade and regularly change their product mix and trade partners, but foreign firms exhibit less churning. Finally, most of the growth in Chinese exports between 2003-2005 was driven by deepening and broadening of trade relationships by surviving firms, while reallocations across firms contributed only 30%. These stylized facts shed light on the cost structure of international trade and the importance of foreign ownership for firms’ export and import decisions.

exporters, importers, multinational firms, margins of trade

Abstract:
This paper takes the Asian crisis as an example to show that the Autoregressive Conditional Hazard (ACH) model is a powerful tool for studying the time series features of speculative attacks. The ACH model proposes a duration variable to capture the changes in the frequency of attacks, which might be an important factor influencing investors1 expectations. The empirical results show that the ACH model explains the crisis far better than the Probit model. The duration variable is highly significant while most fundamentals are not. The contagion effect is tested and accepted under the ACH specification.

ACH, currency crisis, duration analysis

Abstract:
While new conventional wisdom warns that developing countries should be aware of the risks of premature capital account liberalization, the costs of not removing exchange controls have received much less attention. This paper investigates the negative effects of exchange controls on trade. To minimize evasion of controls, countries often intensify inspections at the border and increase documentation requirements. Thus, the cost of conducting trade rises. The paper finds that a one standard-deviation increase in the controls on trade payment has the same negative effect on trade as an increase in tariff by about 14 percentage points. A one standard-deviation increase in the controls on FX transactions reduces trade by the same amount as a rise in tariff by 11 percentage points. Therefore, the collateral damage in terms of foregone trade is sizable.

Abstract:
This paper uses new customs data on the universe of Chinese trading firms to infer the relative importance of production efficiency and product quality for firms’ export success. We establish five novel stylized facts. First, firms charging higher export prices earn larger revenues within each destination, have bigger worldwide sales, and export to more markets. Second, firms that pay higher import prices offer higher export prices, have bigger worldwide sales, and export to more markets. Third, firms set higher prices in larger, richer and more distant markets. Fourth, there is a positive correlation between export price and revenue across destinations within a firm. Finally, firms with larger worldwide export revenues and more export markets pay a wider range of import prices and offer a broader menu of export prices. These results suggest that more successful exporters use higher-quality inputs to produce higher-quality goods (stylized facts 1 and 2) and that firms vary both product quality and mark-ups across destinations in response to market toughness and consumer income (stylized facts 3, 4 and 5).

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This paper uses new customs data on the universe of Chinese trading firms to infer the relative importance of production efficiency and product quality for firms’ export success. We establish five novel stylized facts. First, firms charging higher export prices earn larger revenues within each destination, have bigger worldwide sales, and export to more markets. Second, firms that pay higher import prices offer higher export prices, have bigger worldwide sales, and export to more markets. Third, firms set higher prices in larger, richer and more distant markets. Fourth, there is a positive correlation between export price and revenue across destinations within a firm. Finally, firms with larger worldwide export revenues and more export markets pay a wider range of import prices and offer a broader menu of export prices. These results suggest that more successful exporters use higher-quality inputs to produce higher-quality goods (stylized facts 1 and 2) and that firms vary both product quality and mark-ups across destinations in response to market toughness and consumer income (stylized facts 3, 4 and 5).

export prices, firm heterogeneity, productivity, quality

Abstract:
This paper quantifies how much of exports from eight East Asian economies were consumed by consumers in China, US, Japan, other developed economies, and the rest of the world. We control for the indirect exports through China, i.e., the parts and components that East Asian economies exported to China and subsequently re-exported to other countries. A unique firm-level database is utilised to get an accurate measure for such indirect exports. The main findings are: (i) US consumers still account for more exports from East Asian economies than Chinese consumers do, and the total gross exports from East Asian economies to China overstate the importance of final demand from China; and (ii) the share of exports from East Asia that were consumed by the US, Japan, other OECD countries, and China did not change drastically from 2000 to 2006. Chinese consumers did become more important, noticeably for Japan and Korea, but even in these two countries, the magnitude of change is only about 5-6 percentage of their total exports. These findings indicate that the final demand side of trade in East Asia has changed only moderately since 2002.

China, processing trade, vertical integration, intra-Asia trade

Abstract:
Trade reform conditions are common in IMF supported programs. Of the 99 countries that had IMF programs during 1993-2003, 77 had conditions on trade reforms in their programs. Since the WTO has not been found especially effective in promoting trade openness for most developing countries, it is of great interest to see if the IMF has been more effective as it combines carrots and sticks not available to the WTO. Yet, the effectiveness of trade conditions in IMF programs has not been systematically studied. Using a unique dataset, this paper provides such an assessment. It finds that trade conditions are associated with an increase in trade openness on average, but the effect comes mostly from countries that, by some measure, have a high degree of willingness to reform.

Abstract:
This paper provides firm-level evidence that credit constraints restrict international trade flows and affect the pattern of foreign direct investment. Using detailed data from China, we show that foreign-owned firms and joint ventures have better export performance than private domestic firms, and this advantage is systematically greater in sectors at higher levels of financial vulnerability measured in a variety of ways. This confirms that financial frictions hamper international trade and is consistent with foreign affiliates being less credit constrained because they can tap internal funding from their parent company. We also find that private Chinese firms are relatively more successful exporters than state-owned enterprises in financially dependent industries. Since SOEs enjoy easier access to lending from Chinese state-owned banks, this pattern suggests that they use resources less efficiently. Our results imply that FDI can compensate for domestic financial market imperfections and alleviate their impact on aggregate growth, trade and private sector development. Credit constraints and host-country financial institutions thus offer a new explanation for the sectoral and spatial composition of MNC activity.

international trade, MNCs, export margins, credit constraints

Abstract:
This paper uses newly available data on Chinese trade flows to establish novel and confirm existing stylized facts about firm heterogeneity in trade. First, the bulk of exports and imports are captured by a few multi-product firms that transact with a large number of countries. Second, the average importer imports more products than the average exporter exports, but exporters trade with more countries than importers do. Third, compared to private domestic firms, foreign affiliates and joint ventures trade more and import more products from more source countries, but export fewer products to fewer destinations. Fourth, the relationship between firms' intensive and extensive margin of trade is non-monotonic, differs between exporters and importers, and depends on the ownership structure of the firm. Fifth, firms frequently exit and re-enter into trade and regularly change their product mix and trade partners, but foreign firms exhibit less churning. Finally, most of the growth in Chinese exports between 2003-2005 was driven by deepening and broadening of trade relationships by surviving firms, while reallocations across firms contributed only 30%. These stylized facts shed light on the cost structure of international trade and the importance of foreign ownership for firms' export and import decisions.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This paper estimates the effect of China's fiscal stimulus package on output and employment. The input–output analysis shows that the package has a multiplier of approximately 0.84 in the short run, generating 18–20 million new jobs in non-farming sectors in the first year. A dynamic structural model shows that the multiplier is around 1.1 in the medium run as fiscal spending leads to higher household consumption and corporate investment over time. The size of the fiscal multiplier also depends on the cyclical conditions of the economy, the policy environment and the distribution of funds across sectors.