Developing Economies最新文献

Recent studies on the China–US trade war surprisingly find complete tariff pass-through into import prices for both China and the United States. This paper provides additional evidence of tariff pass-through in China. Using firm-level monthly trade transaction data, we estimate the tariff pass-through for Chinese imports in the period of WTO accession during 2000–2006. Consistent with evidence during the trade war, tariff pass-through is also complete for tariff reductions induced by the WTO accession. Structural estimates of export supply elasticity also imply complete tariff pass-through. Additionally, we find the complete pass-through result holds regardless of firm ownership types, product end-use, or China's market share in world imports.

This study empirically examines how a reduction in input tariffs changes firms' choices between domestic and foreign inputs. In order to do so, we employ Indonesian manufacturing surveys from 2002 to 2010 and compute the share of imported inputs among total inputs at the firm-product level. With this dataset, we examine the effect of preferential tariffs for ASEAN countries—that is, ASEAN Free Trade Area (AFTA) tariffs. Our findings can be summarized as follows: First, we found that a reduction in AFTA tariffs in Indonesia encouraged plants to raise their share of foreign inputs. Second, such an effect of AFTA tariffs was observed only for indigenous plants, or those whose primary sales market is the domestic market. Third, we found that the more productive plants experienced a greater impact of AFTA tariffs on foreign inputs. In short, the reduction in AFTA tariffs encouraged input reallocation, at least in some specific firms in Indonesia.

This study examines the effects of identified industry tariff shocks on firms' outward foreign direct investment (FDI) into their destinations. Using rich Korean firm-level data for 2010–18, the study decomposes FDI outflows from multinational enterprises (MNEs) into the number of subsidiaries (extensive margin) and average FDI for individual subsidiaries (intensive margin) in the destination. New evidence of tariff-driven FDI reveals that the tariff decrease shocks (TDS) (significant tariff decreases) lower the number of existing subsidiaries rather than the average FDI volume for the existing subsidiaries. In addition, more productive firms investing in developing countries lower the number of existing subsidiaries to a greater extent in response to TDS, implying that productive MNEs reallocate resources into selective core subsidiaries when a significant tariff decrease occurs.

Using monthly trade data from January 2018 to December 2019, we empirically examine the effects of the US-China trade war on Taiwan's exports as well as imports. On the export side, the tariff hike in the US against imports from China may increase Taiwan's exports to the US, (i.e., the substitution effect). To investigate this hypothesis, we examine how US tariffs on goods from China affect Taiwan's exports to the US. More directly, we also explore how China's exports to the US change Taiwanese exports to the US. On the import side, decline of China's export to the US may boost Taiwan's export while increasing its demand on Chinese intermediate inputs. Our empirical analyses confirmed the validity of these hypotheses. By contrast, we did not find a substitution effect in exports from neighboring countries—that is, Japan and South Korea.

This study empirically investigates the effects of tariff reductions in a least developed country on its economy. Specifically, we focus on tariff reductions based on the ASEAN Free Trade Area (AFTA) in Laos. First, we analyze how the reduction of AFTA tariff rates in Laos affects Laos's imports from AFTA member countries. Our main finding is that the reduction of AFTA tariffs in Laos does not significantly change Laos's imports. Second, we investigate their effects on plant-level employment. Consistent with the observation of a negligible change in Laos's imports, we find no significant changes in plant-level employment. In short, although Laos decreased its tariff rates against other AFTA members, imports from them did not significantly increase, and no significant changes occurred in employment. We discuss several possible reasons for these insignificant effects.

This study empirically examines how trade liberalization changes individuals' wages, with evidence from Thailand. We primarily focus on the effect of Thailand's tariff reduction under the ASEAN free trade regime. We use individual-level employment data for 2001, 2006, 2011, and 2016. We find that the reduction in AFTA tariffs in Thailand decreases the relative wages of the more educated and skilled workers. Thus, trade liberalization contributes to narrowing income inequality in terms of education and skills. Contrastingly, we do not find heterogeneous effects according to age, sex, marital status, location, or company size. Moreover, the results do not differ significantly between industries with or without international competitiveness.