[DP9246] (December 2012)
Abstract If trade barriers are managed by inefficient institutions, trade liberalization can lead to greater-than-expected gains. We examine Chinese textile and clothing exports before and after the removal of externally imposed quotas. Both the surge in export volumes and the decline in prices after the quota removal are driven by net entry, implying that the pre-liberalization quota allocation is not based on firm productivity. Removing this misallocation accounts for a substantial share of the overall productivity gains associated with the quota removal.
[관련기사]
학술보고서 : The External Impact of China's Exchange Rate Policy: Evidence from Firm Level Data
학술보고서 : The Organization of Production and Trade |