Input-Trade Liberalization, Export Prices and Quality Upgrading

37 Pages Posted: 5 Feb 2015

See all articles by Maria Bas

Maria Bas

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Vanessa Strauss‐Kahn

ESCP Europe; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: October 1, 2013

Abstract

This paper explores the impact of input trade liberalization on imported input and exported product prices. Using Chinese transaction data for 2000-2006, we capture causal effects between exogenous input tariff reductions and within firm changes in HS6-traded product prices. For identification, we make use of a natural control group of firms that are exempted from paying tariffs. Both imported input and export prices rise. The effect on export prices is specific to firms sourcing inputs from developed economies and exporting output to high-income countries. Results are consistent with a scenario within which firms exploit the input tariff cuts to access high-quality inputs in order to quality-upgrade their exports.

Keywords: Imported inputs, trade liberatization, export prices, quality upgrade, mark-up, firm-level data

JEL Classification: F10, F12, F13

Suggested Citation

Bas, Maria and Strauss‐Kahn, Vanessa, Input-Trade Liberalization, Export Prices and Quality Upgrading (October 1, 2013). Available at SSRN: https://ssrn.com/abstract=2557508 or http://dx.doi.org/10.2139/ssrn.2557508

Maria Bas

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Vanessa Strauss‐Kahn (Contact Author)

ESCP Europe ( email )

79 Avenue de la Republique
Paris, 75011
France

HOME PAGE: http://sites.google.com/site/vstrausskahn

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

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Paris Cedex 15, F-75015
France

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