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Trade liberalisation and Chinese firm’s exports: Sourcing from Indonesia
Author(s) -
Ing Lili Yan,
Tian Wei,
Yu Miaojie
Publication year - 2021
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.13058
Subject(s) - liberalization , china , international economics , productivity , international trade , economics , business , market economy , macroeconomics , political science , law
Abstract 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.