Anxiety or pain? The impact of tariffs and uncertainty on Chinese firms in the trade war

• 成果类型: Article
• 署名作者: Benguria, Felipe; Choi, Jaerim; Swenson, Deborah L.; Xu, Mingzhi (Jimmy)
• 署名单位: University of Kentucky; University of Hawaii System; University of California System; University of California Davis; National Bureau of Economic Research; Peking University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2022.103608
• 发表日期: 2022
• 关键词: Trade war; TARIFFS; Trade policy uncertainty; Firm-level analysis

摘要

The unexpected outbreak of the U.S.-China trade war led to dramatic increases in the import and export tariffs confronting Chinese firms, and ushered in an era of unprecedented trade policy uncertainty (TPU). To assess the effects of this development on the operations of Chinese firms we adopt a new textual analysis approach to listed firms' annual reports that allows us to create measures of TPU that vary over firms and time. Linking our new TPU measures to firm-level trade war exposure shows that increases in U.S. tariffs and Chinese retaliatory tariffs elevated firm-level TPU. The effects of Chinese firm-level tariff changes on firm TPU are heterogeneous: smaller firms experienced the most pronounced increases while firms that were more diversified in terms of partner countries were more insulated. Importantly, connecting firm-level increases in TPU during the trade war with subsequent firm performance reveals notable impairment of firm operations. Our estimates indicate that Chinese firms hit by a one standard deviation increase in TPU during the trade war reduced firm-level investment, R&D expenditures, and profits by 2.3, 2.3, and 11.5 percent, respectively.(c) 2022 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).