Towards a More Efficient Tariff Rate Quota Regime: Evidence from Chinese Firm-Level Grain Imports

• Main Author: Xie, Chaoping
• Other Authors: Agricultural and Applied Economics
• Format: Others
• Published: Virginia Tech 2020
• Subjects: Agricultural Trade; Margins; State-Owned Enterprises; Tariff Rate Quota
• Online Access: http://hdl.handle.net/10919/99339

Pioneered by Bernard et al. (1995) and Melitz (2003), recent advances in the international economics literature emphasizing the role of firm-level productivity differences has shed new light on the dynamics of international trade. Despite gaining significant traction in the international economics literature, firm-level analysis in the agricultural economics literature is comparatively rare, particularly in an emerging, industrialized economy such as China. This dissertation consists of three essays that provide firm-level analysis on Chinese agricultural trade since China's accession to the world trade organization (WTO). In the first essay, I segment by ownership structure to examine the role of different firm types in Chinese agricultural trade and find that domestic, private firms dominate Chinese agricultural trade and contribute 60%, or $96 billion, of the agricultural trade growth over the 2000-2016 period. Furthermore, the results show that although the economic weight of the state sector is declining, the share of state-owned enterprises (SOE) in strategically important commodities, such as wheat, corn, and rice imports are consistently high. In the second essay, I develop an empirical strategy to break down China's agricultural import trade growth. The findings reveal that China's agricultural import growth is highly concentrated among a small group of firms, where the top 10% of Chinese agricultural importers account for nearly 90% of the country's agricultural imports. I also find evidence of significant agri-food product importer turnover as over 40% of new firms entering China's agricultural import market exited after just 1.7 years during our sample period. In the last essay, I evaluate the efficiency of a specific Chinese non-tariff measure (NTM), the tariff rate quota (TRQ), using Chinese firm-level data. Two key findings emerge from this analysis. First, unlike results from country-level analyses, I find that SOEs import quantities are more sensitive to price changes. Additionally, more SOEs import grains when the price differential between domestic and world markets increases. Second, I fail to find any causal difference in the SOE share of TRQ imports before and after the two previously mentioned policy events were implemented to promote the market orientation of Chinese grain imports === PHD