Reading 6c

Reading 6c - China's Exporters and Importers: Firms,...

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China's Exporters and Importers: Firms, Products, and Trade Partners Kalina Manova* Stanford University Zhiwei Zhang International Monetary Fund June 27, 2008 Preliminary and incomplete. Please do not distribute. Abstract. This paper provides a detailed overview of China’s participation in international trade using newly available data on the universe of globally engaged Chinese firms over the 2003-2005 period. We document the distribution of trade flows, product- and trade-partner intensity across both exporting and importing firms, and study the relationship between firms’ intensive and extensive margins of trade. We also compare trade patterns across firms of different organizational structure, distinguishing between domestic private firms, domestic state owned firms, foreign- owned firms, and joint ventures. We explore the variation in foreign ownership across sectors, and find results consistent with recent theoretical and empirical work on the role of credit constraints and contractual imperfections in international trade and investment. Finally, we examine the rapid expansion of China’s trade over the 2003 2005 period, and decompose it into its extensive and intensive margins. We also use monthly data and study the frequent churning and reallocation of trade flows across firms and across products and trade partners within firms. JEL Classification codes: F10, F14, F23. Keywords: exporters, importers, multinational firms, margins of trade. _____________________ * Kalina Manova, Department of Economics, Stanford University, 579 Serra Mall, Stanford, CA 94305, manova@stanford.edu. Zhiwei Zhang, International Monetary Fund, ZZhang@imf.org.
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Introduction Since joining the World Trade Organization in December 2001, China has rapidly expanded its international trade participation and experienced a dramatic rise in multinational firm activity. In the two years between 2003 and 2005 alone, Chinese exports grew by 86% while imports increased by 66%, to reach $548.4 billion and $483.5 billion, respectively. Foreign-owned firms and joint ventures have steadily captured 75% of these trade flows, but the former have expanded faster. These aggregate patterns mask substantial reallocations and variation in activity across firms with different ownership structure, sector affiliation and trade profile. This paper provides a detailed overview of China’s participation in international trade using newly available data on the universe of globally engaged Chinese firms over the 2003-2005 period. These data make it possible to examine the activities of both exporting and importing firms, and study their product and trade partner intensity. It also allows the comparison of trade patterns across firms of different ownership structure, distinguishing between domestic private firms, domestic state owned firms, foreign owned firms, and joint ventures. Finally, the monthly frequency of the data permit the analysis of firm, product and trade partner dynamics. This level of richness and detail in firm-level trade data has so far only been available for
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This note was uploaded on 09/06/2010 for the course ECON ECON0602 taught by Professor Qiu during the Fall '09 term at HKU.

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Reading 6c - China's Exporters and Importers: Firms,...

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