Journal
JOURNAL OF INTERNATIONAL ECONOMICS
Volume 126, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jinteco.2020.103329
Keywords
Firm heterogeneity; Trade liberalization; Intermediate inputs; Productivity; Intermediaries; China
Categories
Funding
- ESRC [ES/M010341/1] Funding Source: UKRI
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We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise. Crown Copyright (C) 2020 Published by Elsevier B.V. All rights reserved.
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