Trade liberalisation and Chinese firm’s exports: Sourcing from Indonesia

We investigate how trade liberalisation affects the performance of Chinese manufacturing firms via sourcing from the South. Taking imports from Indonesia, the largest country in South‐east Asia—China's current trading partner as an example, we find that Chinese firms with higher import shares f...

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Bibliographic Details
Published in:World economy 2021-06, Vol.44 (6), p.1795-1813
Main Authors: Ing, Lili Yan, Tian, Wei, Yu, Miaojie
Format: Article
Language:English
Subjects:
Companies
Economic analysis
Exports
firm performance
Free trade
Imports
International trade
processing trade
Productivity
Sales
trade liberalisation
Trade liberalization
Trading
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Summary:We investigate how trade liberalisation affects the performance of Chinese manufacturing firms via sourcing from the South. Taking imports from Indonesia, the largest country in South‐east Asia—China's current trading partner as an example, we find that Chinese firms with higher import shares from Indonesia perform better in productivity, exports and sales, and they are more likely to engage in processing exports. Moreover, the impacts of foreign trade liberalisation on China's export scopes are more pronounced for firms with larger import shares from Indonesia. Such findings are robust to different empirical specifications.
ISSN:0378-5920
1467-9701
DOI:10.1111/twec.13058