WTO Accession and Performance of Chinese Manufacturing Firms
Open accessAbstract
We examine the effects of trade liberalization in China on the evolution of markups and productivity of manufacturing firms. Although these dimensions of performance cannot be separately identified when firm output is measured by revenue, detailed price deflators make it possible to estimate the average effect of tariff reductions on both. Several novel findings emerge. First, cuts in output tariffs reduce markups, but raise productivity. Second, pro-competitive effects are most important among incumbents, while efficiency gains dominate for new entrants. Third, cuts in input tariffs raise both markups and productivity. We highlight mechanisms that explain these findings in the Chinese context. (JEL D24, F13, L25, L60, O14, P31, P33)
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- Authors
- Brandt, L., Van Biesebroeck, J., Wang, L., & Zhang, Y.
- Affiliations
- University of Toronto (CA)
- Department of Economics, KU Leuven, Naamsestraat 69, 3000 Leuven, Belgium, and CEPR (email: )
- Xiamen University (CN)
- Chinese University of Hong Kong (HK)
- ORCID
- Zhang, Yifan
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2017-09-01
- Volume
- 107
- Issue
- 9
- Pages
- 2784-2820
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W8131331
- Cited by
- 856
- References
- 0
- Citations by year
- 2026: 90 · 2025: 122 · 2024: 141 · 2023: 101 · 2022: 121 · 2021: 97 · 2020: 67 · 2019: 54 · 2018: 30 · 2017: 10 · 2016: 8 · 2015: 6 · 2014: 6 · 2012: 2
- FWCI
- 103.44
- Type
- journal article
- Language
- en
- Open access
- green
- lirias.kuleuven.be
- Licence
- other-oa
- Locations
- American Economic Review (publishedVersion)
- Lirias (submittedVersion, other-oa)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- KU Leuven
- Social Sciences and Humanities Research Council of Canada
- FP7 Ideas: European Research Council (241127)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Social Sciences › Political Science and International Relations › China's Socioeconomic Reforms and Governance
- Keywords
- WTO accession, trade liberalization, manufacturing companies, markups, firm productivity, tariff reduction, output tariffs, input tariffs, pro-competitive effects, new entrants, incumbent firms, Chinese manufacturing
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