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...

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Main Authors:	Kee, Hiau Looi, Tang, Heiwai
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	TOTAL REVENUE EXPORT MARKETS SUPERVISION SUBSTITUTION EQUIPMENT PRODUCTION SULPHATE STOCK MATERIALS SALES CHEMICAL PERFECT COMPETITION MARGINAL COST INDUSTRY VALUE CHAIN EXCHANGE INFORMATION EXPORTS ELASTICITY WELFARE INCENTIVES VARIABLES PRICE INPUTS INPUT PRICES TRENDS OPEN ACCESS TELEVISION PRODUCTION PROCESS DEVELOPMENT LABOR MARKET DATA GLOBAL ECONOMY ELECTRONICS INDUSTRY MANGANESE ORGANIZATIONAL FORM COMMERCE COSTS IRON DEVELOPMENT ECONOMICS EXPORT GROWTH COMPUTERS TEXTILE INDUSTRY ECONOMIC COOPERATION EXCHANGE RATES CONSTRUCTION CUSTOMS PRODUCTS VALUE CHAINS BASE YEAR PRODUCTIVITY WATER ECONOMETRIC MODELS INDUSTRIALIZATION GLOBALIZATION CRITERIA BUYERS MARKETS NET EXPORTS WTO FOREIGN INPUTS RESEARCH MATERIAL PRICE ELASTICITY PRODUCT ELASTICITY OF SUBSTITUTION GROSS DOMESTIC PRODUCT FOREIGN INPUT INVENTORY SUBSTITUTES TRANSACTIONS MANUFACTURING UNEMPLOYMENT EMERGING MARKETS TRANSACTION VALUE ADDED SUBSTITUTE CAPITAL WAGES VERTICAL INTEGRATION INTERNATIONAL TRADE COMMERCIAL VALUE RESULTS VALUE COMPETITIVENESS FOREIGN DIRECT INVESTMENT PRODUCTION FUNCTIONS CREDIT FORMAL ANALYSIS MACROECONOMICS RAW DATA DEMAND GLOBAL SUPPLY CHAINS GLOBAL SUPPLY CHAIN AVERAGE PRICE BALANCE SHEET MARKET BENCHMARK TRADE LIBERALIZATION SUPPLY CHAIN TOTAL SALES PRODUCTION FUNCTION REGRESSION ANALYSIS RESULT GOVERNMENT POLICIES EXPORT SECTOR TRADE GOODS THEORY SUPPLY CHAINS GROWTH RATE COMPARATIVE ADVANTAGE GROWTH STRATEGY PERFORMANCE SUPPLY IMPUTATION REVENUE MONOPOLISTIC COMPETITION WORLD TRADE COMMODITIES SUPPLIERS DATABASE PRICE INDEX OUTSOURCING PRICES INVENTORY MANAGEMENT PRODUCTION COSTS PRODUCTION PROCESSES DEVELOPMENT POLICY FUTURE RESEARCH
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

id	okr-10986-23457
recordtype	oai_dc
spelling	okr-10986-234572021-04-23T14:04:15Z Domestic Value Added in Exports : Theory and Firm Evidence from China Kee, Hiau Looi Tang, Heiwai TOTAL REVENUE EXPORT MARKETS SUPERVISION SUBSTITUTION EQUIPMENT PRODUCTION SULPHATE STOCK MATERIALS SALES CHEMICAL PERFECT COMPETITION MARGINAL COST INDUSTRY VALUE CHAIN EXCHANGE INFORMATION EXPORTS ELASTICITY WELFARE INCENTIVES VARIABLES PRICE INPUTS INPUT PRICES TRENDS OPEN ACCESS TELEVISION PRODUCTION PROCESS DEVELOPMENT LABOR MARKET DATA GLOBAL ECONOMY ELECTRONICS INDUSTRY MANGANESE ORGANIZATIONAL FORM COMMERCE COSTS IRON DEVELOPMENT ECONOMICS EXPORT GROWTH COMPUTERS TEXTILE INDUSTRY ECONOMIC COOPERATION EXCHANGE RATES CONSTRUCTION CUSTOMS PRODUCTS VALUE CHAINS BASE YEAR PRODUCTIVITY WATER ECONOMETRIC MODELS INDUSTRIALIZATION GLOBALIZATION CRITERIA BUYERS MARKETS NET EXPORTS WTO FOREIGN INPUTS RESEARCH MATERIAL PRICE ELASTICITY PRODUCT ELASTICITY OF SUBSTITUTION GROSS DOMESTIC PRODUCT FOREIGN INPUT INVENTORY SUBSTITUTES TRANSACTIONS MANUFACTURING UNEMPLOYMENT EMERGING MARKETS TRANSACTION VALUE ADDED SUBSTITUTE CAPITAL WAGES VERTICAL INTEGRATION INTERNATIONAL TRADE COMMERCIAL VALUE RESULTS VALUE COMPETITIVENESS FOREIGN DIRECT INVESTMENT PRODUCTION FUNCTIONS CREDIT FORMAL ANALYSIS MACROECONOMICS RAW DATA DEMAND GLOBAL SUPPLY CHAINS GLOBAL SUPPLY CHAIN AVERAGE PRICE BALANCE SHEET MARKET BENCHMARK TRADE LIBERALIZATION SUPPLY CHAIN TOTAL SALES PRODUCTION FUNCTION REGRESSION ANALYSIS RESULT GOVERNMENT POLICIES EXPORT SECTOR TRADE GOODS THEORY SUPPLY CHAINS GROWTH RATE COMPARATIVE ADVANTAGE GROWTH STRATEGY PERFORMANCE SUPPLY IMPUTATION REVENUE MONOPOLISTIC COMPETITION WORLD TRADE COMMODITIES SUPPLIERS DATABASE PRICE INDEX OUTSOURCING PRICES INVENTORY MANAGEMENT PRODUCTION COSTS PRODUCTION PROCESSES DEVELOPMENT POLICY FUTURE RESEARCH 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. 2015-12-18T20:52:16Z 2015-12-18T20:52:16Z 2015-11 Working Paper http://documents.worldbank.org/curated/en/2015/11/25462516/domestic-value-added-exports-theory-firm-evidence-china http://hdl.handle.net/10986/23457 English en_US Policy Research Working Paper;No. 7491 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	TOTAL REVENUE EXPORT MARKETS SUPERVISION SUBSTITUTION EQUIPMENT PRODUCTION SULPHATE STOCK MATERIALS SALES CHEMICAL PERFECT COMPETITION MARGINAL COST INDUSTRY VALUE CHAIN EXCHANGE INFORMATION EXPORTS ELASTICITY WELFARE INCENTIVES VARIABLES PRICE INPUTS INPUT PRICES TRENDS OPEN ACCESS TELEVISION PRODUCTION PROCESS DEVELOPMENT LABOR MARKET DATA GLOBAL ECONOMY ELECTRONICS INDUSTRY MANGANESE ORGANIZATIONAL FORM COMMERCE COSTS IRON DEVELOPMENT ECONOMICS EXPORT GROWTH COMPUTERS TEXTILE INDUSTRY ECONOMIC COOPERATION EXCHANGE RATES CONSTRUCTION CUSTOMS PRODUCTS VALUE CHAINS BASE YEAR PRODUCTIVITY WATER ECONOMETRIC MODELS INDUSTRIALIZATION GLOBALIZATION CRITERIA BUYERS MARKETS NET EXPORTS WTO FOREIGN INPUTS RESEARCH MATERIAL PRICE ELASTICITY PRODUCT ELASTICITY OF SUBSTITUTION GROSS DOMESTIC PRODUCT FOREIGN INPUT INVENTORY SUBSTITUTES TRANSACTIONS MANUFACTURING UNEMPLOYMENT EMERGING MARKETS TRANSACTION VALUE ADDED SUBSTITUTE CAPITAL WAGES VERTICAL INTEGRATION INTERNATIONAL TRADE COMMERCIAL VALUE RESULTS VALUE COMPETITIVENESS FOREIGN DIRECT INVESTMENT PRODUCTION FUNCTIONS CREDIT FORMAL ANALYSIS MACROECONOMICS RAW DATA DEMAND GLOBAL SUPPLY CHAINS GLOBAL SUPPLY CHAIN AVERAGE PRICE BALANCE SHEET MARKET BENCHMARK TRADE LIBERALIZATION SUPPLY CHAIN TOTAL SALES PRODUCTION FUNCTION REGRESSION ANALYSIS RESULT GOVERNMENT POLICIES EXPORT SECTOR TRADE GOODS THEORY SUPPLY CHAINS GROWTH RATE COMPARATIVE ADVANTAGE GROWTH STRATEGY PERFORMANCE SUPPLY IMPUTATION REVENUE MONOPOLISTIC COMPETITION WORLD TRADE COMMODITIES SUPPLIERS DATABASE PRICE INDEX OUTSOURCING PRICES INVENTORY MANAGEMENT PRODUCTION COSTS PRODUCTION PROCESSES DEVELOPMENT POLICY FUTURE RESEARCH
spellingShingle	TOTAL REVENUE EXPORT MARKETS SUPERVISION SUBSTITUTION EQUIPMENT PRODUCTION SULPHATE STOCK MATERIALS SALES CHEMICAL PERFECT COMPETITION MARGINAL COST INDUSTRY VALUE CHAIN EXCHANGE INFORMATION EXPORTS ELASTICITY WELFARE INCENTIVES VARIABLES PRICE INPUTS INPUT PRICES TRENDS OPEN ACCESS TELEVISION PRODUCTION PROCESS DEVELOPMENT LABOR MARKET DATA GLOBAL ECONOMY ELECTRONICS INDUSTRY MANGANESE ORGANIZATIONAL FORM COMMERCE COSTS IRON DEVELOPMENT ECONOMICS EXPORT GROWTH COMPUTERS TEXTILE INDUSTRY ECONOMIC COOPERATION EXCHANGE RATES CONSTRUCTION CUSTOMS PRODUCTS VALUE CHAINS BASE YEAR PRODUCTIVITY WATER ECONOMETRIC MODELS INDUSTRIALIZATION GLOBALIZATION CRITERIA BUYERS MARKETS NET EXPORTS WTO FOREIGN INPUTS RESEARCH MATERIAL PRICE ELASTICITY PRODUCT ELASTICITY OF SUBSTITUTION GROSS DOMESTIC PRODUCT FOREIGN INPUT INVENTORY SUBSTITUTES TRANSACTIONS MANUFACTURING UNEMPLOYMENT EMERGING MARKETS TRANSACTION VALUE ADDED SUBSTITUTE CAPITAL WAGES VERTICAL INTEGRATION INTERNATIONAL TRADE COMMERCIAL VALUE RESULTS VALUE COMPETITIVENESS FOREIGN DIRECT INVESTMENT PRODUCTION FUNCTIONS CREDIT FORMAL ANALYSIS MACROECONOMICS RAW DATA DEMAND GLOBAL SUPPLY CHAINS GLOBAL SUPPLY CHAIN AVERAGE PRICE BALANCE SHEET MARKET BENCHMARK TRADE LIBERALIZATION SUPPLY CHAIN TOTAL SALES PRODUCTION FUNCTION REGRESSION ANALYSIS RESULT GOVERNMENT POLICIES EXPORT SECTOR TRADE GOODS THEORY SUPPLY CHAINS GROWTH RATE COMPARATIVE ADVANTAGE GROWTH STRATEGY PERFORMANCE SUPPLY IMPUTATION REVENUE MONOPOLISTIC COMPETITION WORLD TRADE COMMODITIES SUPPLIERS DATABASE PRICE INDEX OUTSOURCING PRICES INVENTORY MANAGEMENT PRODUCTION COSTS PRODUCTION PROCESSES DEVELOPMENT POLICY FUTURE RESEARCH Kee, Hiau Looi Tang, Heiwai Domestic Value Added in Exports : Theory and Firm Evidence from China
geographic_facet	East Asia and Pacific China
relation	Policy Research Working Paper;No. 7491
description	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.
format	Working Paper
author	Kee, Hiau Looi Tang, Heiwai
author_facet	Kee, Hiau Looi Tang, Heiwai
author_sort	Kee, Hiau Looi
title	Domestic Value Added in Exports : Theory and Firm Evidence from China
title_short	Domestic Value Added in Exports : Theory and Firm Evidence from China
title_full	Domestic Value Added in Exports : Theory and Firm Evidence from China
title_fullStr	Domestic Value Added in Exports : Theory and Firm Evidence from China
title_full_unstemmed	Domestic Value Added in Exports : Theory and Firm Evidence from China
title_sort	domestic value added in exports : theory and firm evidence from china
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/11/25462516/domestic-value-added-exports-theory-firm-evidence-china http://hdl.handle.net/10986/23457
_version_	1764453894827540480

Domestic Value Added in Exports : Theory and Firm Evidence from China

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