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Connect to Trade

Haoyuan Ding, Haichao Fan, Shu Lin, Feb 21, 2018

A key foundation of Chinese-style institutions is that different levels of government control resources and utilize their power to support businesses connected to them. Professors Haoyuan Ding of Shanghai University of Finance and Economics, Haichao Fan of Fudan University, and Shu Lin of the Chinese University of Hong Kong develop a theoretical model and present supporting empirical evidence to show how this institutional feature affects firm exports in China. In particular, they find that political connection has a positive effect on export in industries that heavily rely on external finance and contracting environment, but a negative effect on export in other industries.

Bilateral Trade and Shocks in Political Relations: Evidence from China

Yingxin Du, Jiandong Ju, Carlos D. Ramirez, Xi Yao, Mar 14, 2018

To what extent do political relations between countries affect their economic exchange? Using evidence of China’s relations with other major powers during the period of 1990 to 2013, Yingxin Du, Jiandong Ju, Carlos D. Ramirez, and Xi Yao point out the time-aggregation bias in the existing empirical research and provide insights on the relationship between political shocks and trade.

Chinese Infrastructure Projects Help Spread Economic Activity in the Global South

Richard Bluhm, Axel Dreher, Andreas Fuchs, Bradley C. Parks, Austin M. Strange, Michael J. Tierney, Dec 29, 2021

Using our recently published geolocated dataset on Chinese government-financed transport infrastructure investments from 2000 to 2014, we show that these investments lead to a decentralization of economic activity within the subnational jurisdictions where they are located. Our analysis documents that this decentralization shifts activity toward suburban and peri-urban areas in low-income countries. We find no evidence suggesting that these projects systematically alter the distribution of activity across subnational jurisdictions.

Anxiety or Pain? The Impact of Tariffs and Uncertainty on Chinese Firms in the Trade War

Felipe Benguria, Jaerim Choi, Deborah Swenson, Mingzhi Xu, Nov 04, 2020

We analyze the firm-level impacts of the US-China trade war since it is of great economic importance to understand how the unprecedented and dramatic increases in the import and export tariffs confronting Chinese firms affected the firm-level policy environment and firm operational outcomes. To contribute to this effort, we study how increases in US tariffs and Chinese retaliatory tariffs raised Chinese firms’ trade policy...

Tournament-Style Political Competition and Local Protectionism: Theory and Evidence from China

Hanming Fang, Ming Li, Zenan Wu, Feb 22, 2023

Inter-jurisdictional competition in a regionally decentralized authoritarian regime distorts local politicians’ incentives in resource allocation among firms from their own city and a competing city.