The Domestic Segment of Global Supply Chains in China Under State Capitalism

65 Pages Posted: 4 Jun 2014

See all articles by Heiwai Tang

Heiwai Tang

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS); The University of Hong Kong - Faculty of Business and Economics; CESIfo; Kiel Institute for the World Economy

Wang Fei

University of International Business and Economics (UIBE) - School of International Trade and Economics

Zhi Wang

U.S. International Trade Commission

Multiple version iconThere are 3 versions of this paper

Date Written: May 3, 2014

Abstract

This paper proposes methods to incorporate firm heterogeneity in the standard IO-table based approach to portray the domestic segment of global value chains in a country. Using Chinese firm census data for both manufacturing and service sectors, along with constrained optimization techniques, we split the conventional IO table into sub-accounts, which are used to estimate direct and indirect domestic value added in exports of different types of firm. We find that in China, both state-owned enterprises (SOEs) and small and medium domestic private enterprises (SMEs) have much higher shares of indirect exports and ratios of value-added exports to gross exports (VAX), compared to foreign-invested and large domestic private firms. Based on IO tables for both 2007 and 2010, we find increasing VAX ratios for all firm types, particularly for SOEs. By extending the method proposed by Antràs et al. (2012), we find that SOEs are consistently more upstream while SMEs are consistently more downstream within industries. These findings suggest that SOEs still play an important role in shaping China’s exports.

Keywords: value-added trade, global supply chain, intra-national trade, state capitalism

JEL Classification: F10, C67, C82

Suggested Citation

Tang, Heiwai and Fei, Wang and Wang, Zhi, The Domestic Segment of Global Supply Chains in China Under State Capitalism (May 3, 2014). CESifo Working Paper Series No. 4797, Available at SSRN: https://ssrn.com/abstract=2445382

Heiwai Tang (Contact Author)

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS) ( email )

1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
United States

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

CESIfo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Wang Fei

University of International Business and Economics (UIBE) - School of International Trade and Economics ( email )

10 East Huixin Street
Chaouang District
Beijing, 100029
China

Zhi Wang

U.S. International Trade Commission ( email )

500 E Street, SW
Washington, DC 20436
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
64
Abstract Views
500
rank
85,529
PlumX Metrics