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Abstract
This paper investigates the distinct effects of capital and intermediates imports on firms' productivity growth, and quantifies the importance of tariff structure in trade liberalization in developing countries. Using a large panel of Chinese manufacturing firms, we demonstrate that capital import has a substantially larger productivity effect than intermediates import. On the one hand, while both types of imports exert immediate effects on productivity, only capital import has dynamic productivity effects. On the other hand, we identify significant R&D-capital synergy effect and R&D-inducing effect from capital import, but there is no clear evidence of these effects from intermediates import. Regarding the effects of China's input tariff liberalization following its WTO accession, the change in tariff structure explains 18 percent of the productivity gains.
Original language | English |
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Article number | 102677 |
Journal | Journal of Development Economics |
Volume | 152 |
Early online date | 29 Jun 2021 |
DOIs | |
Publication status | Published - 1 Sept 2021 |
Bibliographical note
Funding Information:We benefitted from discussions with Costas Arkolakis, Shengyu Li, Mark Roberts, Hylke Vandenbussche, Yifan Zhang, and presentations at the Eighth Annual Conference of China Trade Research Group (2017), the 13th Australasian Trade Workshop (2018), the Asia Pacific Trade Seminars (2018) and Beijing Forum (2019). We also thank the editor and two anonymous referees for their insightful comments. This work received financial support from the General Research Fund (#17502018) and the URC/CRCG?Conference Support for Teaching Staff (# 201807170336) at The University of Hong Kong, and research start-up fund from Peking University.
Funding Information:
We benefitted from discussions with Costas Arkolakis, Shengyu Li, Mark Roberts, Hylke Vandenbussche, Yifan Zhang, and presentations at the Eighth Annual Conference of China Trade Research Group (2017), the 13th Australasian Trade Workshop (2018), the Asia Pacific Trade Seminars (2018) and Beijing Forum (2019). We also thank the editor and two anonymous referees for their insightful comments. This work received financial support from the General Research Fund ( #17502018 ) and the URC/CRCG–Conference Support for Teaching Staff ( # 201807170336 ) at The University of Hong Kong , and research start-up fund from Peking University .
Publisher Copyright:
© 2021
Keywords
- Productivity
- Imported inputs
- Capital goods
- Intermediate goods
- R&D
- Tariff liberalization
Fingerprint
Dive into the research topics of 'What you import matters for productivity growth: Experience from Chinese manufacturing firms'. Together they form a unique fingerprint.Projects
- 1 Finished
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Capital Goods, Intermediate Goods and Gains from International Sourcing: Evidence from Chinese Manufacturing Firms (LU Part)
ZHANG, H. & QIU, D. L.
1/01/19 → 30/06/21
Project: Grant Research
Activities
- 1 Other Invited Talks or Presentations
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What you import matters for productivity growth: Experience from Chinese manufacturing firms
Jiawei MO (Speaker), Larry QIU (Speaker) & Hongsong ZHANG (Speaker)
28 Nov 2020Activity: Talks or Presentations › Other Invited Talks or Presentations