Input Trade Liberalization and Export Product Scope: Evidence from China

Chunming Zhao, Qun Zhang

Abstract


This paper explores the impact of input trade liberalization on export product scope of firms in industries with different scope for product differentiation. Firm- and industry-specific tariffs are measured to reflect cost effect (intensive margin) and new input effect (extensive margin) of input tariff reductions. Using tariff data and product-level trade data for 2002-2006, we find that while firms in differentiated product scope expand export product lines greatly, firms in non-differentiated product sector do not expand export product scope significantly, which is robust to different definitions of varieties.


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DOI: https://doi.org/10.5296/ber.v6i2.9530

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Business and Economic Research  ISSN 2162-4860

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