Economics, Econometrics and Finance
4 years ago

Firms in China Boost Export Performance Through Processing Trade Experience.

Journal of Comparative Economics
Learning from processing trade: Firm evidence from China
Xue Bai, Shengjie Hong, Yaqi Wang

Paper Summary

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Firms in China learn from processing exports to improve their regular exports. They get better at exporting products and improve product quality after processing similar items. Firms learn to be more efficient, understand markets better, and access inputs easier through processing. The more competitive the market, the more firms benefit from processing experience. They learn more when dealing with unique products and actively importing for processing. Overall, firms benefit significantly from learning through processing exports.