Competition, markups, and gains from trade: A quantitative analysis of China between 1995 and 2004

• 成果类型: Article
• 署名作者: Hsu, Wen-Tai; Lu, Yi; Wu, Guiying Laura
• 署名单位: Singapore Management University; Academia Sinica - Taiwan; Tsinghua University; Nanyang Technological University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2019.103266
• 发表日期: 2020
• 关键词: Gains from trade; markups; Pro-competitive effects; ACR formula; Head-to-head competition; Chinese economy

摘要

This paper provides a quantitative analysis of gains from trade in a model with head-to-head competition using Chinese firm-level data from Economic Censuses in 1995 and 2004. We find a significant reduction in trade cost during this period, and total gains from such improved openness during this period is 7.1%. The gains are decomposed into a Ricardian component and two pro-competitive ones, The pro-competitive effects account for 20% of the total gains. Moreover, the total gains from trade are 13 - 31% larger than what would result from the formula provided by ACR (Arkolakis et al., 2012), which nests a class of important trade models, but without pro-competitive effects. We find that head-to-head competition is the key reason behind the larger gains, as trade flows do not reflect all of the effects via markups in an event of trade liberalization. (C) 2019 Elsevier B.V. All rights reserved.