Trade Liberalization and Markup Dispersion: Evidence from China's WTO Accession

• 成果类型: Article
• 署名作者: Lu, Yi; Yu, Linhui
• 署名单位: National University of Singapore; Zhejiang University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20140350
• 发表日期: 2015
• 页码: 221-253
• 关键词: geographic concentration; productivity growth; firm; COMPETITION; misallocation; welfare; DYNAMICS; IMPACT; ups

摘要

In this paper, we empirically investigate whether trade liberalization affects markup dispersion, a potential source of resource misallocation. The identification uses China's WTO accession at the end of 2001. We show that trade liberalization reduces markup dispersion within a narrowly defined industry. We also examine both price and cost responses to trade liberalization, as well as heterogeneous effects across firms and across locations. Our study contributes to the literature by identifying another potential channel through which free trade benefits a nation.