Contractual Versus Non-Contractual Trade: The Role of Institutions in China

Robert Feenstra, Chang Hong, Hong Ma and Barbara Spencer

No 17728, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent research has demonstrated the importance of institutional quality at the country level for both the volume of trade and the ability to trade in differentiated goods that rely on contract enforcement. This paper takes advantage of cross-provincial variation in institutional quality in China, and export data that distinguishes between foreign and domestic exporters and processing versus ordinary trade, to show that institutional quality is a significant factor in determining Chinese provincial export patterns. Institutions matter more for processing trade, and more for foreign firms, just as we would expect from a greater reliance on contracts in these cases.

JEL-codes: F13 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-cna, nep-dev, nep-int and nep-tra
Note: ITI
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Citations: View citations in EconPapers (12)

Published as Feenstra, Robert C. & Hong, Chang & Ma, Hong & Spencer, Barbara J., 2013. "Contractual versus non-contractual trade: The role of institutions in China," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 281-294.

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Journal Article: Contractual versus non-contractual trade: The role of institutions in China (2013)
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