NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Structural Model of Demand, Cost, and Export Market Selection for Chinese Footwear Producers

Mark J. Roberts, Daniel Yi Xu, Xiaoyan Fan, Shengxing Zhang

NBER Working Paper No. 17725
Issued in January 2012
NBER Program(s):   IO   ITI   PR

In this paper we use micro data on both trade and production for a sample of large Chinese manufacturing firms in the footwear industry from 2002-2006 to estimate an empirical model of export demand, pricing, and market participation by destination market. We use the model to construct indexes of firm-level demand, cost, and export market profitability. The empirical results indicate substantial firm heterogeneity in both the demand and cost dimensions with demand being more dispersed. The firm-specific demand and cost components are very useful in explaining differences in the extensive margin of trade, the length of time a firm exports to a destination, and the number and mix of destinations, as well as the export prices, while cost is more important in explaining the quantity of firm exports on the intensive margin. We use the estimates to analyze the reallocation resulting from removal of the quota on Chinese footwear exports to the EU and find that it led to a rapid restructuring of export supply sources in favor of firms with high demand and low cost indexes.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17725

Users who downloaded this paper also downloaded these:
Feenstra, Hong, Ma, and Spencer w17728 Contractual Versus Non-Contractual Trade: The Role of Institutions in China
Feenstra, Ma, Neary, and Rao w17729 Who Shrunk China? Puzzles in the Measurement of Real GDP
Edmond, Midrigan, and Xu w18041 Competition, Markups, and the Gains from International Trade
Chi, Freeman, and Li w17721 Adjusting to Really Big Changes: The Labor Market in China, 1989-2009
Manova and Zhang w15342 Export Prices Across Firms and Destinations
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us