Mao Qilin:An Analysis of Chinese Firms’ Survival

Date of publication:2016-10-23There have been0A reader to read the article

An Analysis of Chinese Firms’ Survival: Is Intermediate Input Import Important?

Abstract    Based on the firm level micro data and highly disaggregated customs data from 2000 to 2007, this paper analyzes the effects of the intermediate input imports on Chinese firms’   survival with the method of propensity score matching (PSM) and survival analysis. The results show that, intermediate input import is good for firms’ survival on the whole. Taking the quality of intermediate input and trade direction into account, we find that only high quality intermediate input import benefit for firms’ survival significantly, while low quality intermediate input imports raises the risk rate of the firms exiting market. Also, firms’ two way trade behavior increases survival time comparing with one way trade behavior, and processing trade increases survival time comparing with ordinary trade. Furthermore, the transmission mechanism test show that " cost saving effect" and " technology spillover effect" are the two important channels for why intermediate input imports improve firms’ survival. Lastly, we further introduce heterogeneous industries into our study, and finds that compared with homogenous industries, the heterogeneous industries make higher improvement to firms’ survival. Also, the high quality of intermediate input and two way trade mode can strengthen the above effect.

 

This paper is published in Journal of Financial Research, No.10, 2016.