Margins Of Exports Research Articles

The Impact of Imported Timber Price Fluctuations on the Margins of Wood Forest Product Exports: Empirical Evidence from Provincial-Level Data in China

This paper adopts a comprehensive approach to integrating the wood forest product trade of China's provinces with the global market, utilizing over four million records of trade data from the Chinese Customs database and the United Nations Trade and Commerce database, creating a three-dimensional panel dataset structured by year—province—importing country. The paper decomposes the export trade share into extensive margin, quantity margin, and price margin, collectively referred to as the ternary margins of export, to analyze the impact of imported timber price fluctuations on these export margins of wood forest products. The findings indicate that fluctuations in imported timber prices increase uncertainty, thereby suppressing the growth of China's wood forest product export share, extensive margin, and quantity margin while increasing the price margin. Heterogeneity tests further reveal that the impact of imported timber price fluctuations is more pronounced for southern forest regions, labor-intensive wood products, and countries without a free trade agreement. Mechanism tests suggest that increasing forestry fixed asset investment intensity and enhancing timber supply capacity can help mitigate the uncertainty effects associated with imported timber price fluctuations. The paper proposes policy implications, including enhancing local timber supply resilience, strengthening government support for forestry, and reinforcing the supply chain.

The effects of export-facilitating quality infrastructure on Africa’s exports

PurposeThe continuous export challenges due to the inadequate quality infrastructure have brought to the fore the importance of export facilitation-quality infrastructure. Different infrastructure investments have been implemented to facilitate export; however, the outcomes were different across export facilitation infrastructures. This study investigates Africa’s export effects of the implemented export-facilitating quality infrastructure.Design/methodology/approachAn augmented gravity model is specified that is derived from the Helpman, Melitz and Rubenstein framework, which has two steps in the specification and estimation of the model. The extensive margin is the first step – the probability of export – while the second step is the intensive margin of export – the actual export values or volumes.FindingsThe main drivers of the decision to export are telecommunication infrastructure, internet usage and the logistic performance index. At the intensive margin of export, exporting time, the proliferation of telecommunication infrastructure and improvement in the logistics performance index significantly improve the intensity of export, while it is not the case for internet infrastructure usage. Thus, the soft-quality infrastructure has mixed outcomes at both export margins, while the hard-quality infrastructure is insufficient and ineffective for export facilitation, which invalidates the study’s hypothesis that export-facilitating quality infrastructure stimulates exports.Practical implicationsThe implemented export-facilitating quality infrastructure measures have achieved marginal improvement in exports. This is due to the inadequate development finance and investment towards enhancing export-facilitating quality infrastructure. Thus, extensive quality infrastructure is needed to facilitate and intensify exports for sustainable development in Africa.Originality/valueThis study departs from previous studies by investigating export facilitation from the lens of export-oriented quality infrastructure rather than the trade time and costs as dominated in the literature. Moreover, the determination of the extent to which quality infrastructure has influenced the probability of export is rarely investigated.

Trade liberalization and export performance in China: Export-margin approach with firm-level data in 1995–2019

A key challenge facing developing countries is how to promote export performance through trade liberalization (TL). Using large and highly disaggregate firm-level data with 6-digit HS categories for 1995–2019, we investigate the issue for China based on the recent literature of export margins (XM). Export growth is decomposed into extensive and intensive margins (EM and IM), and IM further into price and quantity margins (PM and QM). We develop three empirical hypotheses based on a theoretical model that includes external economies of scale (EES) and industrial agglomeration (IA) as well as TL-XM links. Then we take China's entry to World Trade Organization (WTO) in 2001 as a quasi-natural experiment in difference-in-difference (DID) regressions. The estimate results suggest that TL increases both EM and IM (and QM) but reduces PM after China's entry to TWO in 2001. The finding is robust to various specifications of the empirical model and measurements of the variables. The further estimations show significantly positive effects of EES, IA, and their interactive terms with TL on EM, IM, and QM. The positive effects are larger for medium-tech industries than low-tech and high-tech industries.

Exports, Technical Measures, and Regulatory Heterogeneity

This paper examines the trade effects of dissimilar technical measures between countries. When a company faces different regulations in different markets, its costs can increase from meeting a wider range of requirements and potentially from its inability to exploit economies of scale. We employ firm-level trade data from Chile to estimate the trade impacts of regulatory heterogeneity at various firm margins. We separate the trade impacts between broad classes of technical measures. The results indicate that regulatory heterogeneity is negatively associated with exports. The impacts are observed on both, the extensive and the intensive margins of exports. There are heterogeneous effects depending on the size of the firms with small firms being disproportionately affected from dissimilar technical measures. We also find that the impact of heterogeneity on conformity assessment requirements is no less important, and potentially more important, than the impact of heterogeneity on production requirements.

Does export promotion enhance firm-level intensive margin of exports? Evidence from a meta-regression analysis

PurposeThe impact of export promotion programs (EPPs) on the intensive margin of exports remains somewhat uncertain. This study tackles a crucial question: does export promotion enhance firm-level intensive margin of exports?Design/methodology/approachWe draw upon comprehensive empirical research conducted up to 2023. We collected 951 estimates, constructed 22 variables, captured diverse contexts and employed a meta-analytical approach to scrutinize the considerable variation in findings.FindingsThe overall meta-effect, after filtering out publication bias, is positive and statistically significant. Firms receiving EPP support exhibit an export intensity that is 1–9% higher than firms not participating in such programs. Assessing the mechanisms through which EPPs bolster this, we observe that support in the form of various services plays a more substantial role compared to assistance in the form of financial resources.Research limitations/implicationsEvaluating EPPs and their activities in terms of social welfare falls beyond the scope of this paper, which specifically focuses on the benefits of EPPs to export intensity. Subsequent research should undertake a comprehensive evaluation, considering both economic impacts and costs for accurate assessments of welfare. We also suggest that future meta-analyses explore other dimensions of firm-level performance linked to EPPs.Practical implicationsPublication bias distorts the impacts of EPPs, leading to an overstatement of their actual effects. Adjusting for publication bias, the practical significance of EPPs for a country’s trade intensity appears to be limited. Additionally, the provision of diverse activities and services primarily contributes to the amplification of export margins as compared to subsidies and grants. While larger firms initially benefit more from EPPs, these effects are found to be transitory.Originality/valueThis is the first meta-analysis scrutinizing the impact of EPPs, specifically concentrating on the firm-level intensive margin of exports.

Lights dim, exports down: Examining the trade effects of power shortages on Chinese manufacturing firms

While existing research extensively investigates the repercussions of demand shocks on export performance, limited attention has been given to understanding the trade implications of supply-side input shocks. Utilizing a city-level power shortage index and firm-level data from 2006 to 2014 for the Chinese manufacturing sector, we provide novel evidence of a significant negative impact of power shortages on export performance. This finding remains robust across alternative measurements and in addressing endogeneity concerns. Furthermore, we find that power shortages curtail firms' inventory and innovation activities, which are linked to export performance. Heterogeneity tests reveal insignificant impacts on state-owned firms, those in inland areas and high-energy-consuming industries as well. Additionally, our findings indicate that power shortages exclusively affect the intensive margins of exports rather than the extensive margins. This research offers valuable insights for policymakers and managers in devising strategies to mitigate the adverse effects of power shortages.

Impact of special economic zones on export diversification in sub-saharan Africa

This paper presents a comprehensive analysis of the impact of special economic zones (SEZs) on export diversification in Sub-Saharan Africa (SSA). With export diversification being a key concern for SSA policymakers, many countries in the region have implemented SEZ programs over the last three decades to stimulate industrial development and export-led growth. By providing incentives to attract investment, SEZs aim to enhance the business environment and draw firms from both traditional and emerging sectors. Using a difference-in-differences approach on a panel dataset covering 32 SSA countries from 1970 to 2014, this study investigates the effects of SEZ adoption on overall export diversification, as well as on the extensive and intensive margins of exports. The findings suggest that SEZ adoption has led to a more balanced distribution of export shares among traditional sectors, thereby promoting greater export diversification in SSA countries. However, the effectiveness of SEZs in fostering the creation of entirely new sectors appears to be limited.

How does internet finance affect firm exports? Evidence from China

Internet finance, which can be accessed and delivered through internet technology, has become increasingly important in financial markets. This study examines how internet finance affects the extensive and intensive margins of firm exports. We find that internet finance increases both the extensive and intensive margins of firm exports, with the results varying according to firm type. Specifically, internet finance (i) enhances the extensive margin for high-tech firms more than for low- and medium-tech firms; (ii) improves the extensive margin for large firms rather than for small firms; and (iii) benefits the intensive and extensive margins for high government subsidies firms more than for low government subsidies. Moreover, internet finance promotes exports by alleviating financial constraints and reducing the fixed costs of firm exports.

How Does Trade Liberalization in Imports Affect China's Export Growth Pattern?

Abstract Optimizing export growth patterns and improving the quality of export trade have become prominent issues that need to be addressed urgently in the context of increasing global economic uncertainty. This study utilizes matched data from the CEPII database (1995–2020) and WTO tariff database, adopts a product-level perspective based on the triple margins of exports, and uses an individual-time two-way fixed-effects model to investigate the impact of import trade liberalization on China's export growth pattern. The research findings are as follows: (1) Increasing levels of import trade liberalization are beneficial for enhancing the extensive margin, intensive margin, and quantity margin of products, while exerting a restraining effect on the price margin. This strengthens the price advantage of Chinese products, indicating that import trade liberalization helps optimize China's export growth pattern. (2) Compared with the intensive margin, import trade liberalization has a more significant promoting effect on the extensive margin. (3) The conclusions drawn from heterogeneity analysis suggest that trade liberalization has a more pronounced effect on the extensive margin, intensive margin, and quantity margin of products in medium-high technology industries, differentiated products, and intermediate goods. This study holds important theoretical and practical significance for evaluating the economic benefits of expanding imports, optimizing China's export growth pattern, and improving the quality of export trade.

Estimating the Extensive Margin of Exports in the Chinese Market: The Impact of Digital Trade Facilitation on Export Diversification

Estimating the Extensive Margin of Exports in the Chinese Market: The Impact of Digital Trade Facilitation on Export Diversification

The impacts of lockdown policies on trade margins in the Philippines

The Philippines was among the most infected countries in Southeast Asia at the onset of the COVID-19 outbreak. This study analyzes how the export and import trade margins (extensive and intensive) of the Philippines were affected by the lockdown policies of trading partners. Using a quarterly series of product-by-country data for 20 quarters (quarter one of 2018-quarter four of 2022) and an event-study design, the paper shows that lockdown measures did not affect or mildly affected the intensive margin of exports and the import margins. Instead, the extensive margin of exports was most affected. It declined by 27% in the first quarter and by an average of 46% between the fifth and eleventh quarters of the lockdown. This was largely influenced by the closure of workplaces, stay-home requirements and controls on international travel. Export and import margins of intermediate goods were more resilient to the lockdown shocks. Overall, preventing disruptions in the supply chain networks can help countries adjust better and contribute to a speedy recovery and possible resilience to future shocks.

The complementary effects of ‘Made in China 2025’ industrial policy and trade liberalisation on China’s export of relevant products

ABSTRACT This research explores the synergy between China's 'Made in China 2025' (MIC25) policy and trade liberalization through FTAs, particularly their effect on export margins. Analyzing China's MIC25 product exports from 2011-2019 using DID models, it was found that post-MIC25 implementation, relevant exports saw marked growth in both intensive and quantity margins. Regression analysis revealed the China-Korea FTA significantly improved the quality or price margins of China's MIC25 exports to Korea. The increase in price margins was notably higher in FTA-partner countries. These findings indicate that FTAs enhance industrial policies by bettering market access and reducing costs for high-quality MIC25 products. This study adds to the discourse on trade liberalization and industrial policy's role in export performance, offering valuable insights for policymakers and businesses to understand trade policy impacts and craft industrial strategies complemented by trade liberalization.

The Impact of Access to Intermediate Inputs on Export Margins: Firm-Level Evidence from the Regression Decomposition Approach

This paper analyzes how export margins responded to an intermediate input supply shock caused by the 2020 lockdown in China. We use regression decomposition with triple and quadruple difference-in-differences models to identify causal impacts and mitigate potential heterogeneity in transaction-level customs data from the Bangladesh apparel manufacturing industry. The triple difference estimate shows that the average export value per firm–product–destination combination declined by approximately 65%, leading to a decrease in overall exports of woven apparel from Bangladesh. The input supply shock also adversely affected the subgroups of firms across various firm-level characteristics along the intensive margin. Moreover, the export market share decomposition reveals that the shock significantly affected intensive margins by decreasing incumbents’ market allocation by 9%. An equivalent increase in extensive margins led to a readjustment in the market allocation, leading to fewer market leavers and slightly more new market entrants. Our results indicate that Bangladesh’s exports mostly decreased due to the smaller quantities of products exported rather than there being fewer firms, destinations, or products involved in export trade. There were significant market share reallocations that occurred after the Chinese input supply shock. An appropriate policy stance is required for sustainable export sector growth strategies, which will enhance the country’s defense against potential future shocks and foster the achievement of sustainable development goals (SDGs) in Bangladesh.

Digital economy and China's agricultural exports: based on trade cost and market competition effect

PurposeThe purpose of this study is to explore the effect and mechanism of the digital economy’s influence on the binary margin of agricultural exports.Design/methodology/approachBased on the theoretical analysis of the mechanism of the digital economy’s influence on the binary margin of agricultural exports, this study empirically examines the effect and mechanism of the digital economy’s influence on the binary margin of agricultural exports based on China’s customs export data from 2011 to 2016.FindingsThe relevant findings are threefold. (1) The digital economy significantly improves the binary margin of agricultural exports, and its effect on the intensive margin is stronger than that on the expansive margin. After the expansive margin is subdivided, the effects on the three sub-variables of the expansive margin are in the following order: old products exported to new markets > new products exported to old markets > new products exported to new markets. (2) The heterogeneity analysis reveals that the digital economy has a stronger role in promoting the binary margin of exports for enterprises in the eastern region, high-income countries as the destination of exports and state-owned enterprises. (3) Mechanism analysis shows that the digital economy promotes the binary margin of agricultural exports by reducing trade costs and intensifying market competition.Originality/valueFirst, in terms of research perspective, although there are some studies on the impact of the digital economy on export trade in existing literature, the research objects mainly focus on manufacturing enterprises. In fact, agricultural trade is susceptible to natural conditions and seasonal factors, and countries may impose more SPS measures and TBT measures on agricultural trade due to risk considerations. The relationship between the digital economy and agricultural trade also has its own characteristics, but there are few research studies in this area. At present, only Liu and Gao (2022), based on the data of total imports and exports of different agricultural products from 2004 to 2018, have established a vector auto-regressive model to empirically analyse the heterogeneous dynamic impact of the digital economy on the trade volume of agricultural products. In addition, Ma and Guo (2023) conducted an empirical test on the total effect, regional heterogeneity and threshold effect of the digital economy on agricultural export trade based on China’s provincial panel data from 2011 to 2020. Therefore, under the new circumstances of continuous integration of digital technology and agriculture, this study interprets the impact effect and mechanism of the digital economy on the binary margin of agricultural exports from the perspective of the digital economy, providing new research perspectives and approaches for promoting the growth of agricultural exports. Second, in terms of theoretical analysis, the above studies have not been fully analysed in terms of the specific mechanism of the impact of the digital economy on agricultural exports. Based on the positive and negative characteristics of agricultural trade, this study introduces two kinds of roles into the theoretical analysis framework to comprehensively determine the trade impact effect of the digital economy. Third, in terms of research design, this study empirically examines the impact of the digital economy on the binary margin of agricultural products, passing a series of robustness tests and investigating the mediating roles of trade cost and market competition effects, producing an empirical basis for China to leverage the digital economy to promote the binary margin of agricultural exports.

The effect of maximum residue limit standards on China's agri‐food exports: A health perspective

AbstractThis paper investigates the impact of maximum residue limit (MRL) standards of 2692 chemical substances regulated by 44 importing countries on China's agri‐food exports, disaggregated at HS 8‐digit product level over 2005–2021. We find that MRL standards for health‐threatening chemical substances facilitate China's exports of agri‐food products, while low‐hazard MRLs impede trade. Furthermore, stricter MRL standards for health‐threatening substances reduce the probability of exporting (extensive margin) while generating larger export values conditional on exporting (intensive margin). We also identify that the adjustments of fixed and variable compliance costs resulting from changes in health‐threatening and low‐hazard MRLs contribute to the heterogeneous responses on the extensive and intensive margins of exports.

Cloud computing and extensive margins of exports: Evidence for manufacturing firms from 27 EU countries

<p class="MsoNormal" style="margin-top: 10pt; text-align: justify;"><span lang="EN-US" style="font-family: 'times new roman', times, serif; font-size: 14pt;">The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related.</span></p>

Family ownership, finance for innovation, and exports. Evidence from European micro and small firms

ABSTRACT This study focuses on the impact of ownership and the finance for innovation on the exports of micro and small family-owned firms (FFs) compared with nonfamily-owned firms (non-FFs) for 11 European Union countries from 2014 to 2020. The motivation for the study lies in the fact that when combining ownership and innovation, the net effect on exports is not always predictable. Although family ownership negatively affects exports, the gains from innovation are significantly higher for non-FFs than FFs when studying the extensive margin of exports. This implies that the innovation effect is not sufficient to close the export gap for FFs. Regarding the intensive margin of exports, the magnitude of the innovation effect does not differ by firm-type. Thus, FFs show a low intensive margin just because of their ownership. The results hold for different model specifications and individual countries.

Adaptive Estimation and Uniform Confidence Bands for Nonparametric Structural Functions and Elasticities

Abstract We introduce two data-driven procedures for optimal estimation and inference in nonparametric models using instrumental variables. The first is a data-driven choice of sieve dimension for a popular class of sieve two-stage least-squares estimators. When implemented with this choice, estimators of both the structural function h0 and its derivatives (such as elasticities) converge at the fastest possible (i.e. minimax) rates in sup-norm. The second is for constructing uniform confidence bands (UCBs) for h0 and its derivatives. Our UCBs guarantee coverage over a generic class of data-generating processes and contract at the minimax rate, possibly up to a logarithmic factor. As such, our UCBs are asymptotically more efficient than UCBs based on the usual approach of undersmoothing. As an application, we estimate the elasticity of the intensive margin of firm exports in a monopolistic competition model of international trade. Simulations illustrate the good performance of our procedures in empirically calibrated designs. Our results provide evidence against common parameterizations of the distribution of unobserved firm heterogeneity.

The impact of management practices on export margins of firms: evidence from a recent Egyptian industrial survey

PurposeThe paper aims at studying the effect of management practices on the extensive and intensive export margins of Egyptian manufacturing firms.Design/methodology/approachThe study relies on the 2020/2021 Egyptian Industrial Firm Behavior Survey (EIFBS) which comprises 2,383 manufacturing firms representing small, medium, and large sized firms located in different regions of Egypt: Urban Governorates, Lower Egypt, and Upper Egypt. It constructs an overall management z score for each firm to estimate its effect on a firm’s probability of exporting and value of exports using Ordinary Least Squares (OLS) regressions.FindingsResults indicate that good management is associated with a higher probability of firm exporting as well as higher export revenues conditional on exporting, robust to controlling for the level of domestic sales. These effects do not differ by firm ownership or type of sector, but rather by firm size, with managerial competence raising the probability of exporting more for large-sized firms. Additionally, good management is associated with higher firm productivity, innovation and worker training propensities which gives evidence that it is both an efficiency and a quality enhancer. Moreover, monitoring and targeting practices have significant positive effects on both margins, while incentives are only significant for the extensive margin.Practical implicationsFirms that aim at enhancing their export prospects and revenues should devote resources to review and upgrade their management systems to boost their product quality and production efficiency. Policy-wise, the government should create a competitive market environment that is open to both domestic and foreign firms’ entry to stimulate the adoption of better management practices.Originality/valueThe paper is the first to explore the link between firm management practices and export outcomes for a MENA country (Egypt). It makes use of a recent survey, the 2020/2021 Egyptian Industrial Firm Behavior Survey (EIFBS). The findings shed light on the importance of different management components (monitoring, targeting and incentives) in driving a manufacturing firm’s export performance.

In the Gains from Trade as Firms Matter, So Do Their Sizes

This article examines whether the gains from economic integration agreements (EIAs) vary across firm sizes. The empirical analysis makes use of a unique and unbalanced panel dataset with 1,520 country pairs, firm sizes and EIAs from 2007 to 2017. First, we decompose the aggregate export flows across firm sizes, that is, micro, small, medium and large. Second, we deconstruct the extensive and intensive export margins across firm sizes. The empirical model follows a panel estimator with structural gravity specification and estimates the EIA coefficients by employing three-way (exporter-time, importer-time and country-pair) fixed effects. The results indicate that EIAs positively affect overall export flows for firms of all sizes; however, for large and medium-sized firms, this positive effect is primarily through the intensive margin, whereas, for the small and micro-sized firms, it is exclusively through the extensive margin. JEL Codes: F1, F15