Processing Trade, Tarff Reductions, and Firm Productivity: Evidence from Chinese Firms

Economic Journal, Forthcoming

58 Pages Posted: 6 Jan 2011 Last revised: 4 Mar 2014

See all articles by Miaojie Yu

Miaojie Yu

Peking University - China Center for Economic Research (CCER)

Date Written: November 1, 2013

Abstract

This paper 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 fi…rms receive on imported inputs. Firm-level input and output tarffs 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 tari¤ 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.

Keywords: Processing Trade, Productivity, Firm Heterogeneity, Chinese Products

JEL Classification: F1, L1, O1, O2

Suggested Citation

Yu, Miaojie, Processing Trade, Tarff Reductions, and Firm Productivity: Evidence from Chinese Firms (November 1, 2013). Economic Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1734720 or http://dx.doi.org/10.2139/ssrn.1734720

Miaojie Yu (Contact Author)

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, Beijing 100871
China
+86-10-6275-3109 (Phone)

HOME PAGE: http://mjyu.ccer.edu.cn

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