Import liberalization and export product mix

Date

2021

Advisors

Journal Title

Journal ISSN

ISSN

1540-5982

Volume Title

Publisher

Wiley

Type

Article

Peer reviewed

Yes

Abstract

This paper develops a monopolistic competition model of multiproduct firms to explain the effect of trade liberalization on the product mix of multiproduct exporting firms. The model shows that input-tariff reduction leads to increases in a firm’s export values, especially for products that are farther from a firm’s core competency. To test the theoretical predictions, we use the merged data built upon the highly disaggregated Chinese firm-level production data and customs data for 2000-2006. Consistent with the theory, the positive impact of input trade liberalization on export value is found to be more pronounced for peripheral products, and input-tariff reduction also expands a firm’s product scope, affecting firm’s average productivity.

Description

The file attached to this record is the author's final peer reviewed version.

Keywords

Import tariff, Product mix, Trade liberalization

Citation

Fan, H., Luong, T., Lai, E. and Zhang, L. (2021) Import liberalization and export product mix. Canadian Journal of Economics,

Rights

Research Institute

Institute for Applied Economics and Social Value (IAESV)