Multi-Product Exports, Imported Inputs and Within-Firm Productivity Dispersion

This study designs a method to estimate the productivity of exported products by combining custom and firm survey data. To build a productivity link between imports and exports, we also estimate the contribution of import scope to productivity. By using micro data during trade liberalization in China, we find that both the aggregate revenue productivity of exports and the relative efficiency of imported inputs declined. Moreover, the average fixed cost of exporting an HS6 product decreased by 50%, expanding the scope of not only exports but also imports and the comovement of the two. Experiencing a decline of 15%, the average fixed cost of importing an HS6 product expands import scope, but the main driver for the expansion of import scope is the change in productivity. Furthermore, the asymmetry change in the two fixed costs explains most of the rise in trade surplus