Gone for good? subsidies with export share requirements in China: 2002–13

Defever, Fabrice and Riaño, Alejandro (2015) Gone for good? subsidies with export share requirements in China: 2002–13. World Bank Economic Review, 29 . pp. 135-144. ISSN 0258-6770

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Abstract

This paper presents a simple model of subsidies with export share requirements (ESR) in a heterogeneous firm environment. A two-country general equilibrium version of the model with a single 100% ESR is calibrated using firm-level data from the 2002 wave of the Business Environment and Enterprise Performance Survey collected by the World Bank for China. The calibrated model is used to gauge the change in subsidies with ESR that is consistent with the fall in the share of ‘pure exporters’, firms exporting all their output, observed in China, from 25.7% in 2002 to 11.1% in 2013. Our results indicate that a 6.9% reduction in the ad-valorem subsidy rate available to firms that export all their output is consistent with the observed fall in their share of exporting firms. Expenditure in subsidies (as a share of value-added) falls by 66% and welfare in China increases by 1.76% while real income in the rest of the world falls by 0.59%.

Item Type: Article
Additional Information: This is a pre-copyedited, author-produced PDF of an article accepted for publication in World Bank Economic Review following peer review. The version of record: Fabrice Defever and Alejandro Riano, 2015, Gone for good? subsidies with export share requirements in China: 2002- 2013, World Bank Economic Review (2015) 29 (suppl 1): S135-S144 is available online at: http://wber.oxfordjournals.org/content/29/suppl_1/S135
Keywords: China, Subsidies, export share requirements
Schools/Departments: University of Nottingham UK Campus > Faculty of Social Sciences > School of Economics
Identification Number: https://doi.org/10.1093/wber/lhv020
Depositing User: Kesaite, Viktorija
Date Deposited: 08 Sep 2015 08:55
Last Modified: 22 Oct 2016 03:00
URI: http://eprints.nottingham.ac.uk/id/eprint/29833

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