How do reductions in input trade costs affect firm's sales decision between domestic and foreign markets? Aside from tariffs cut in ordinary imports over time, a large extent of firms engaged in duty-free processing trade also experienced a decline in input trade cost. Accordingly, the imported...

This paper provides a comprehensive overview of China's processing trade using highly disaggregated 2010 transaction-level data. By highlighting the key role of processing trade in China's foreign trade, we argue that various free-trade zones have served as important instruments in boosting...

Trade theory has no clear prediction on how import protection affects an importing sector's relative size. In this paper, we estimate the impact of US trade protection on industrial production relative size based on a translog GDP functional system. Using an industrial panel data set and...

The paper first analyzes the pattern of trade for China and India in the new century. We find that: (1) Both countries have high openness ratios that positively associated with their growing labor productivity over years. (2) China’s world export share keeps increasing whereas India maintains...

Demographic structure has both the scale effect and the structural effect on bilateral trade. The "scale effect" refers that a low dependency ratio of exporter can produce and export more. Similarly, importer's low dependency ratio can induce more income and hence import more. The "structural...

Firms’ adaptive innovation processes are derived from their swift and flexible responses to environmental changes. Since firms exhibit heterogeneity in their ability to effectively anticipate market moves, some outperform others in developing appropriate innovation processes. Therefore, we...

Owing to the evolving nature of markets, firms’ ability to enact strategic innovation plays an essential role when adapting to environmental changes and maintaining advantages under intense competition. Incumbent firms will exhibit superior performance in sustainable growth if they can...