The Value of Information in International Trade: Gains to Outsourcing Through Hong Kong

39 Pages Posted: 15 Nov 2002 Last revised: 30 Oct 2010

See all articles by Robert C. Feenstra

Robert C. Feenstra

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Gordon H. Hanson

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS); National Bureau of Economic Research (NBER)

Songhua Lin

Denison University - Department of Economics

Date Written: November 2002

Abstract

In this paper, we estimate the benefits to countries that purchase goods from China of having access to intermediary services provided by Hong Kong. Traders in Hong Kong supply information on markets and producers in China, which provides welfare gains to foreign firms using these services. During the 1990s, Hong Kong intermediated about half of the goods that China exported to the rest of the world. Our results suggests that gains to intermediary services provided by Hong Kong equal 16% of the value of goods that China exports to other countries through Hong Kong, and range between 10% and 21% of this export value for various manufacturing goods and across different years.

Suggested Citation

Feenstra, Robert C. and Hanson, Gordon H. and Lin, Songhua, The Value of Information in International Trade: Gains to Outsourcing Through Hong Kong (November 2002). NBER Working Paper No. w9328. Available at SSRN: https://ssrn.com/abstract=351780

Robert C. Feenstra (Contact Author)

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
916-752-9240 (Phone)
916-752-9382 (Fax)

National Bureau of Economic Research (NBER)

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Gordon H. Hanson

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Songhua Lin

Denison University - Department of Economics ( email )

Granville, OH 43023
United States

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