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on International Activities of Firms |
| By: | Zou, Tao; Gong, Yundan |
| Abstract: | We study how third-country supply chains reconfigure under the 2018-2019 US tariff escalation on Chinese goods, using comprehensive transaction-level trade and domestic business-to-business records for firms in Vietnam. Exploiting exogenous variation in firm-level tariff exposure constructed from pre-treatment export portfolios, we find that both value-added processing and transshipment contribute to triangular trade through Vietnam, but activate on distinct timelines: transshipment responds immediately while processing activates mainly after the May 2019 escalation signals tariff permanence. Supply chain network adjustment precedes trade value expansion, with upstream Chinese supplier diversification beginning first, local intermediate sourcing activating later, and downstream US buyer adjusting last. Opening the third-country supply chain interior, we show that over half of the tariff-induced local sourcing expansion channels Chinese intermediate content, and that local sourcing from China-embedded local suppliers responds at 3.2 times the magnitude of independent local suppliers. These results indicate that global value chains relocation to Vietnam activated processing capacity but extended rather than displaced Chinese supply chain influence in the third country. |
| Keywords: | Trade war, Supply chain reconfiguration, Local sourcing, Vietnam |
| JEL: | F13 F14 F23 L14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kcgwps:342501 |
| By: | Freeman, Rebecca; Garofalo, Marco; Longoni, Enrico; Manova, Kalina; Mari, Rebecca; Prayer, Thomas; Sampson, Thomas |
| Abstract: | How does dismantling deep integration affect international trade? This paper studies the consequences of economic disintegration by estimating the impact of Brexit on goods trade by UK firms. The UK’s exit from the EU’s single market and customs union in January 2021 led to an immediate, sharp drop in both exports and imports with the EU for the average UK firm, and caused many firms to stop trading with the EU altogether. But Brexit’s impact on aggregate trade was mitigated by three forces: larger firms were less hard hit; exports to non-EU countries were unaffected; and importers partially compensated for reduced EU imports by sourcing more from outside the EU. Our estimates imply that leaving the EU reduced worldwide UK exports by 6:4% and worldwide UK imports by 4:4% within the first two years. Adjustment patterns indicate that these effects were driven by higher variable and fixed UK-EU trade costs and imperfect input substitutability across origins, with little role for scale effects, capacity constraints, input cost shocks, or sourcing complementarities. |
| Keywords: | Trade policy; Brexit; Disintegration; Deep integration |
| JEL: | F13 F14 F15 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19869 |
| By: | Cai, Chenchen |
| Abstract: | The expansion of international agri-food trade has increased the importance of product quality and safety in global markets. Because many safety and quality attributes are difficult to verify at the border, buyers and regulators often rely on collective reputation when assessing an origin’s reliability; consequently, noncompliance by a single exporter can impose reputational externalities on otherwise compliant firms from the same origin. These reputational externalities create incentives for exporting countries, especially those with large rural populations and strong reliance on agri-food exports, to strengthen domestic quality governance to align with evolving international standards and meet increasingly stringent market requirements. At the same time, stricter governance can raise compliance and production costs, making its net effect on export performance theoretically ambiguous. China—one of the world’s largest agri-food exporters and the largest developing economy—offers a useful context for assessing the trade effects of domestic quality governance. We use a staggered difference-in-differences design to assess how the EQSD program (the dummy variable) affects firms’ export dynamics. EQSD raises export values among incumbent exporters and increases the number of new exporters, with stronger effects for larger firms. Meanwhile, treated incumbents reduce the number of exported product varieties, consistent with greater specialization in core products rather than broad portfolio expansion. EQSD also strengthens compliance capacity: firms are more likely to obtain internationally recognized certifications (e.g., HACCP and ISO 22000), and these international certifications are followed by higher uptake of domestic certifications (e.g., green-product labels), consistent with learning-by-exporting. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404383 |