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The Domestic Segment of Global Supply Chains in China under State Capitalism

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  • Heiwai Tang
  • Fei Wang
  • Zhi Wang

Abstract

This paper proposes methods to incorporate firm heterogeneity in the standard IO-table based approach to portray the domestic segment of global value chains in a country. Using Chinese firm census data for both manufacturing and service sectors, along with constrained optimization techniques, we split the conventional IO table into sub-accounts, which are used to estimate direct and indirect domestic value added in exports of different types of firm. We find that in China, both state-owned enterprises (SOEs) and small and medium domestic private enterprises (SMEs) have much higher shares of indirect exports and ratios of value-added exports to gross exports (VAX), compared to foreign-invested and large domestic private firms. Based on IO tables for both 2007 and 2010, we find increasing VAX ratios for all firm types, particularly for SOEs. By extending the method proposed by Antràs et al. (2012), we find that SOEs are consistently more upstream while SMEs are consistently more downstream within industries. These findings suggest that SOEs still play an important role in shaping China’s exports.

Suggested Citation

  • Heiwai Tang & Fei Wang & Zhi Wang, 2014. "The Domestic Segment of Global Supply Chains in China under State Capitalism," CESifo Working Paper Series 4797, CESifo.
    • Handle: RePEc:ces:ceswps:_4797
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    References listed on IDEAS

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    Cited by:

    1. Hubert Escaith, 2014. "Mapping global value chains and measuring trade in tasks," Chapters, in: Benno Ferrarini & David Hummels (ed.), Asia and Global Production Networks, chapter 9, pages 287-337, Edward Elgar Publishing.
    2. Fetzer, James & Howells III, Thomas F. & Jones, Lin & Strassner, Erich & Wang, Zhi, 2016. "Estimating Extended Supply‐Use Tables in Basic Prices with Firm Heterogeneity for the United States: A Proof of Concept," Conference papers 332686, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. James J. Fetzer & Tina Highfill & Kassu W. Hossiso & Thomas F. Howells III & Erich H. Strassner & Jeffrey A. Young, 2021. "Accounting for Firm Heterogeneity within US Industries: Extended Supply-Use Tables and Trade in Value Added Using Enterprise and Establishment Level Data," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 311-342, National Bureau of Economic Research, Inc.
    4. Tang, Weiqi & Meng, Bo & Wu, Libo & Liu, Yu, 2016. "Undermined climate policies : a study on the impact of regulatory and financial discrimination across heterogeneous firms in China," IDE Discussion Papers 622, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Meng, Bo & Liu, Yu & Andrew, Robbie & Zhou, Meifang & Hubacek, Klaus & Xue, Jinjun & Peters, Glen & Gao, Yuning, 2018. "More than half of China’s CO2 emissions are from micro, small and medium-sized enterprises," Applied Energy, Elsevier, vol. 230(C), pages 712-725.

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    More about this item

    Keywords

    value-added trade; global supply chain; intra-national trade; state capitalism;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access

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