| Abstract: |
This paper uses newly available data on Chinese trade flows to establish novel
and confirm existing stylized facts about firm heterogeneity in trade. First,
the bulk of exports and imports are captured by a few multiâ€product firms
that transact with a large number of countries. Second, the average importer
imports more products than the average exporter exports, but exporters trade
with more countries than importers do. Third, compared to private domestic
firms, foreign affiliates and joint ventures trade more and import more
products from more source countries, but export fewer products to fewer
destinations. Fourth, the relationship between firms’ intensive and
extensive margin of trade is non-monotonic, differs between exporters and
importers, and depends on the ownership structure of the firm. Fifth, firms
frequently exit and re-enter into trade and regularly change their product mix
and trade partners, but foreign firms exhibit less churning. Finally, most of
the growth in Chinese exports between 2003-2005 was driven by deepening and
broadening of trade relationships by surviving firms, while reallocations
across firms contributed only 30%. These stylized facts shed light on the cost
structure of international trade and the importance of foreign ownership for
firms’ export and import decisions. |