Paper Title
Heterogeneous Impact of Non-Tariff Measures Through The Global Value Chains: Empirical Evidence from China

By using firm-level customs data, manufacturing census data, and China’s Input-Output Tables, this paper investigates the impact of non-tariff measure (NTM)’s stringency on Chinese firms’ positioning in the GVC, which is measured by two types of GVC positioning indices, namely, output upstreamness and input downstreamness indices. We then estimate the impact of NTMs on various firm performance by paying special attention to how the impacts vary across firms with different positioning in the GVC. The empirical results show that NTMs imposed against and imposed by China could significantly reduce firms’ linkages with foreign countries, thereby reducing the firms’ importance within the GVC. We also find that stricter NTMs could even hinder firms’ innovative activities and decrease exports and imports. Further analysis indicates that these negative impacts of NTMs on firms are heterogeneous across firms depending on their original position in the GVC; firms with higher output upstreamness or input downstreamness receive smaller effect than those with lower GVC positioning index. Keywords - Global Value Chain, Non-Tariff Measure, Upstreamness, Downstreamness.