Seminar （Dept. of Trade Economics）

Theme：Import License, Misallocation, and Aggregate Total Factor Productivity in the Chinese Steel Industry

Speaker：Su Li (Renmin University of China)

Time：2021-04-28 16:00

Address：Room 309, Mingde Business Building

Language：Chinese/English

Abstract:

This paper examines how import license restriction-induced resource misallocation affects industry aggregate total factor productivity (TFP). We apply a recently proposed consistent estimator to a micro-level data from the Chinese steel industry, considering material price heterogeneity; We finding the importers' TFP is not significantly higher than that of the non-importers, and resource misallocation caused by the iron-ore import license lowers aggregate productivity. Our analysis indicates that removing the trade barrier counterfactually would increase the industrial TFP by 42.4%, on average.