GTAP Resources: Resource Display
| GTAP Resource #7207 |
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"Anti-Granular Comparative Advantage" by Ai, Jianwei, Haoran Li, Gary Lyn, Anton Yang and Wendong Zhang Abstract There is growing evidence that a small set of large firms play a crucial role in international trade, shaping the origin countries’ comparative advantage, specialization and export patterns. Unlike this “granular comparative advantage” pattern found in previous studies, we find instead an anti-granular comparative advantage pattern holds generally for firms operating in a global manufacturing powerhouse, China. Breaking down by firm ownership-type reveals that this anti-granular comparative advantage pattern is largely driven by state-owned firms and Chinese-owned private firms. In contrast, we find that a strong granular comparative advantage pattern holds for foreign-owned firms. Building on this insight, we develop a multi-sector trade model with heterogeneous firm ownership type and employ a SSM-based estimation procedure to quantify the role of granular comparative advantage embodied in leading large foreign-owned firms in shaping fundamental comparative advantage across sectors. Finally, we quantify the welfare implications of increased privatization on the Chinese economy. |
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- Bridging CGE and new quantitative trade (NQT) literature - New quantitative trade models - Advances in quantitative methods - Model extension/development |
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Public Access  Paper (53.0 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
