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on International Activities of Firms |
| By: | Ngov, Meng Yu; Vézina, Pierre-Louis; Tran, Trang Thu; Nayyar, Gaurav |
| Abstract: | This paper documents how foreign firms, inputs, and subsidies have shaped the development of Viet Nam’s solar panel industry. The analysis uses firmto-firm transaction data from Panjiva as well as firm-level data from the Viet Nam’s Enterprise Survey to trace solar panel value chains. It uncovers three key findings. First, parts and components from subsidizing countries are 30 percent cheaper than alternatives. Those from China, which provides the majority of solar inputs to Vietnamese producers, are cheapest. Foreign green subsidies may thus spill over across countries via value chains. Second, Chinese FDI firms dominate Viet Nam’s solar industry, accounting for 75% of exports and 50 percent of jobs, and they export solar panels that are 38 percent cheaper than those of other producers in Viet Nam. Third, local firms supplying parts and components to these Chinese FDI firms experience positive productivity gains. The findings show how Viet Nam’s solar boom emerged through deep integration into China’s subsidized supply chains. |
| Date: | 2026–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11478 |
| By: | Pisch, Frank; Huang, Hanwei; Manova, Kalina; Perello, Oscar |
| Abstract: | How do production networks and market structure interact to shape the effects of trade and competition policy? We develop a model with two-sided firm heterogeneity, matching frictions, and imperfect supplier competition. More productive buyers match with more suppliers, inducing tougher supplier competition, lower input costs, and higher profits. Entry upstream thus benefits high-productivity buyers, while lower trade or matching costs favor mid-productivity buyers. Empirical evidence confirms that larger French and Chilean firms import higher quantities at lower prices as more Chinese suppliers enter, and that suppliers charge diversified buyers lower markups. We adapt methods for combinatorial, discrete-choice problems to estimate the model and perform counterfactuals. The interaction of endogenous networks and markups significantly amplifies the gains from policies that facilitate supplier entry or firm matching, and from deep trade agreements that combine tariff cuts with such policies. Fixed networks dampen while fixed markups amplify the gains from traditional tariff liberalization. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:162612 |