In a seminal contribution, Yi (2003) has shown that vertically specialized trade should be more sensitive to changes in trade costs than regular trade. Yet empirical evidence of this remains remarkably scant. This paper uses data from China's processing trade regime to analyze the role of trade...

The core idea behind the paper is that trade policy matters for the organization of global value chains, a notion largely neglected by economists but which has important implications for our understanding of trade and the international transmission of trade policy shocks. We develop a...

This paper unveils a systematic pattern in the People's Republic of China's (PRC) processing trade. In a cross-section of the PRC's provinces, the average distance traveled by processing imports (import distance) is negatively correlated with the average distance traveled by processing exports...