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Input tariff liberalisation and servitisation in manufacturing: Evidence from China's WTO accession

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  • Shuzhong Ma
  • Guangjian Xu
  • Hongsheng Zhang

Abstract

This paper links the sharp drop in China's manufacturing servitisation (MS) in early 21st century to China's accession to WTO featured by conspicuous input trade liberalisation (ITL). The results show that manufacturing industries exposed to higher degree of ITL suffer more MS declines after China's accession to the WTO. Heterogeneous analysis shows that industries with high import intensity, capital intensity or technology intensity suffer more MS declines following input trade liberalisation. Further analysis shows that input trade liberalisation increases the import of intermediate inputs while significantly reduces the proportion of service imports for manufacturing industries. The results are robust to a series of robustness checks.

Suggested Citation

  • Shuzhong Ma & Guangjian Xu & Hongsheng Zhang, 2019. "Input tariff liberalisation and servitisation in manufacturing: Evidence from China's WTO accession," The World Economy, Wiley Blackwell, vol. 42(12), pages 3569-3587, December.
    • Handle: RePEc:bla:worlde:v:42:y:2019:i:12:p:3569-3587
    DOI: 10.1111/twec.12854
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