| Abstract: |
We use data on Chinese manufacturing firms to study the connection between
individual firm imports and firm export outcomes. Since our panel covers the
years 2002 to 2006, we can use changes in import tariffs associated with
China’s WTO entry as instruments. Our regression results show that firms that
expanded their intermediate input imports expanded the volume of their exports
and increased their export scope, though the magnitude of the effects differed
by import source, firm organizational form, and industry R&D intensity. On
these dimensions, we find that imported intermediate inputs from OECD rather
than non-OECD countries generated larger firm export improvements, that
private Chinese firms derived larger benefits from imported inputs than did
foreign invested firms, and that imported intermediates were especially
helpful in expanding the exports of firms operating in high R&D intensity
industries. Taken together, these results suggest that product upgrading
facilitated by technology or quality embedded in imported inputs helped
Chinese firms to increase the scale and breadth of their participation in
export markets. |