IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v56y2024i46p5477-5495.html
   My bibliography  Save this article

Does financial liberalization matter for domestic value added in exports? Evidence from China

Author

Listed:
  • Shan Wan
  • Dongjun Zhu
  • Jie Sun
  • Bingbing Xu

Abstract

Upstream stages of production chains are often capital intensive, so financial liberalization which improves the availability of financial resources may expand the supply of domestic inputs and then raise domestic value added in exports of downstream firms. After China’s accession to the WTO, China’s government removed the restrictions on foreign banks’ business and allowed foreign banks in China to offer Chinese currency (RMB) services to Chinese firms. We utilize this policy change to test the effects of financial liberalization on Chinese firms’ domestic value added in exports. We have three main findings: (1) domestic value added in Chinese firms’ exports is positively associated with the removal, (2) the removal of foreign bank business restrictions leads to a general change of local financial markets, which facilitates firms’ financing activities and (3) the improvement in domestic value added following the removal is not mainly driven by export mode switching from processing trade to ordinary trade but by the increase in domestic inputs.

Suggested Citation

  • Shan Wan & Dongjun Zhu & Jie Sun & Bingbing Xu, 2024. "Does financial liberalization matter for domestic value added in exports? Evidence from China," Applied Economics, Taylor & Francis Journals, vol. 56(46), pages 5477-5495, October.
    • Handle: RePEc:taf:applec:v:56:y:2024:i:46:p:5477-5495
    DOI: 10.1080/00036846.2023.2257034
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2023.2257034
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2023.2257034?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:56:y:2024:i:46:p:5477-5495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.