Domestic Value Added in Exports : Theory and Firm Evidence from China
China has defied the declining trend in domestic content in exports in many countries. This paper studies China’s rising domestic content in exports using firm- and customs transaction-level data. The approach embraces firm heterogeneity and hence...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/11/25462516/domestic-value-added-exports-theory-firm-evidence-china http://hdl.handle.net/10986/23457 |
| Summary: | China has defied the declining trend in
domestic content in exports in many countries. This paper
studies China’s rising domestic content in exports using
firm- and customs transaction-level data. The approach
embraces firm heterogeneity and hence reduces aggregation
bias. The study finds that the substitution of domestic for
imported materials by individual processing exporters caused
China’s domestic content in exports to increase from 65 to
70 percent in 2000–2007. Such substitution was induced by
the country’s trade and investment liberalization, which
deepened its engagement in global value chains and led to a
greater variety of domestic materials becoming available at
lower prices. |
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