The Connection between Imported Intermediate Inputs and Exports: Evidence from Chinese Firms

46 Pages Posted: 28 Jul 2012 Last revised: 25 May 2023

See all articles by Ling Feng

Ling Feng

Shanghai University of Finance and Economics - School of Finance

Ling Feng

affiliation not provided to SSRN

Zhiyuan Li

Shanghai University of Finance and Economics - School of Economics

Deborah L. Swenson

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: July 2012

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.

Suggested Citation

Feng, Ling and Feng, Ling and Li, Zhiyuan and Swenson, Deborah L., The Connection between Imported Intermediate Inputs and Exports: Evidence from Chinese Firms (July 2012). NBER Working Paper No. w18260, Available at SSRN: https://ssrn.com/abstract=2119035

Ling Feng (Contact Author)

Shanghai University of Finance and Economics - School of Finance ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

Ling Feng

affiliation not provided to SSRN

Zhiyuan Li

Shanghai University of Finance and Economics - School of Economics ( email )

777 Guoding Road
Shanghai, 200433
China

Deborah L. Swenson

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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