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.