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Growing like China: Firm Performance and Global Production Line Position

Manova, K; Chor, D; Yu, Z; (2021) Growing like China: Firm Performance and Global Production Line Position. Journal of International Economics , 130 , Article 103445. Green open access

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Abstract

Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992–2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, fixed costs incurred, and profits. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.

Type: Article
Title: Growing like China: Firm Performance and Global Production Line Position
Open access status: An open access version is available from UCL Discovery
Publisher version: https://www.sciencedirect.com/journal/journal-of-i...
Language: English
Additional information: Copyright © 2021 Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Keywords: Global value chains, Production line position, Upstreamness, Firm heterogeneity,Firm lifecycle,China
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10120236
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