Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123254
Authors: 
Kee, Hiau Looi
Tang, Heiwai
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5614
Abstract: 
China has defied the declining trend in domestic content in exports in many countries. We study China’s rising domestic content in exports using firm- and customs transaction-level data. Our approach embraces firm heterogeneity and hence reduces aggregation bias. We find that the substitution of domestic for imported materials by individual processing exporters caused China’s domestic content in exports to increase from 65% to 70% in 2000-2007. Such substitution was induced by the country’s trade and investment liberalization, which deepened its engagement in global value chains and led to a greater variety of domestic materials becoming available at lower prices.
Subjects: 
firm heterogeneity
domestic value added
value added trade
China
global value chains
trade liberalization
FDI liberalization
JEL: 
F10
F14
Document Type: 
Working Paper

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