We explore the impact of financial friction on resource misallocation and total factor productivity (TFP) of China. First, the mathematical models are derived to clarify the mechanism and consequence of resource misallocation, showing that financial friction leads to resource mismatch, and thus...

Chinas historic accession to the World Trade Organization (WTO) in November 2001 not only represents an important milestone in Chinas integration into the global economy, but is also among the most important events in the history of the WTO and the multilateral trading system. Through a thorough...