“Exit” vs. “Voice”: Global Sourcing, Multinational Production, and the China Trade Lobby

2021 ◽  
pp. 1-27
Author(s):  
Ka Zeng
Keyword(s):  
Multinational Corporations ◽  
Sunk Costs ◽  
Economic Activities ◽  
Trade Relations ◽  
China Trade ◽  
Albert Hirschman ◽  
Multinational Production ◽  
Vertical Foreign Direct Investment ◽  
Economic Engagement ◽  
Related Trade

Abstract This paper examines the influence of three different forms of global economic engagement on the lobbying behavior of US businesses with regard to trade relations with China: (a) input sourcing; (b) downstream export; and (c) vertical foreign direct investment. It will be hypothesized that firms involved in all three forms of global economic activities should have incentives to lobby over China-related trade issues in order to maintain unimpeded access to sources of supply or markets and to ensure the smooth operation of the entire supply chain. Going further, drawing on the exit-voice framework developed by Albert Hirschman (1972), it will be argued that compared to firms in those industries mainly involved in input sourcing from China, American multinational corporations that have verticalized their production should have even stronger incentives to engage in lobbying activities and “voice” their policy preferences due to their greater “sunk costs” and hence the higher cost of “exit.” Statistical analysis of the China trade-related lobbying activities of US firms between 2006 and 2016 lends substantial support to these conjectures.

Problem of Yuan Undervaluation in US-China Trade Relations

2012 ◽  
pp. 20-28
Author(s):  
A. Polivach
Keyword(s):  
Exchange Rate ◽  
National Currency ◽  
Chinese Government ◽  
Scientific Validity ◽  
Trade Relations ◽  
China Trade ◽  
The Us ◽  
World Economic ◽  
Us Dollar ◽  
World Economic Crisis

Before the world economic crisis the Chinese government restricted the sphere of the Yuan’s circulation exceptionally by the domestic market. Basically, until that time the Yuan was not freely convertible while the Chinese foreign trade transactions were operated with the help of the US dollar. This is a sufficient reason to state that the issue of Yuan’s underestimated exchange rate has no fundamental relevance. However, the crisis forced China to substantially extend the utilization of its national currency in the international settlements. This is especially true in case of mutual settlements with the neighbor countries. So far, presumably, the issue of Yuan’s underestimated exchange rate will, at last, receive a scientific validity only when the Chinese national currency will become fully convertible and the scales of its utilization will become comparable with those of the traditional hard currencies.

Main Characteristics of Vietnam–China Trade Relations, 2000–15

China Report ◽  
2017 ◽  
Vol 53 (3) ◽  
pp. 355-366
Author(s):  
Ngo Xuan Binh
Keyword(s):  
Data Analysis ◽  
Bilateral Trade ◽  
Trade Imbalance ◽  
Trade Relations ◽  
Export Structure ◽  
The North ◽  
China Trade ◽  
Key Characteristics ◽  
Import And Export ◽  
The Relationship

Entering the 21st century, trade relations between Vietnam and China have grown strongly, making positive contributions to the economic development of the two countries. However, the relationship in the period 2000–15 also witnessed a number of thorny issues such as a serious trade imbalance against Vietnam, the ‘North to South’ nature in the import and export structure of the two countries, Vietnam’s growing dependence on bilateral trade with China, and so on. These issues have affected negatively Vietnam’s economy. Based on data analysis, the author identifies the key characteristics of trade relations between Vietnam and China and highlights possible solutions for Vietnam to move its trade relations with China in a more balanced direction.

scholarly journals Transformation of Criteria for the Efficiency of Economic Activities of Countries in the Context of the Modern Model of Globalization

2019 ◽  
Vol 20 (2) ◽  
pp. 261-293 ◽  
Author(s):  
Galina Makarova ◽  
Vasilii Rudyakov
Keyword(s):  
Geographic Location ◽  
Developed Countries ◽  
Economic Research ◽  
Economic Science ◽  
Main Task ◽  
Economic Activities ◽  
Factors Affecting ◽  
Trade Relations ◽  
Stage Of Development ◽  
National Economies

Although macroeconomics as an independent economic science emerged only in the twen­tieth century, the first steps in developing the macroeconomic aspect of efficiency were taken several centuries earlier — beginning from the 16th — 17th centuries — at the pre-industrial stage of development of society. Due to the underdevelopment of the production sphere, the search for sources of growth in the efficiency of national economies at that time was mainly carried out from the most general economic positions — as an integral part of solving the main task of the economics of those eras — searching for ways and means of increasing the wealth of nations. At the same time, naturally, among the first were the climatic and foreign economic factors of increasing the efficiency of national economies. For example, factors related to identifying the advantages of various countries in a geographic location and the ability to solve their economic problems by using the most advantageous options for organizing and conducting foreign economic and trade relations. The transition of developed countries to new stages of development — industrial and postindustrial, as well as the selection by John M. Keynes of the new direction of economic research — macroeconomics, historically leads both to a deepening of the meaning of the very category of “macroeconomic efficiency” and to more detailed studies of factors affecting it.

scholarly journals A Model for Companies to Overcome US–China Conflict on International Trade

2019 ◽  
Vol 5 ◽  
pp. 1
Author(s):  
Miguel Sousa ◽  
Maria J. Sousa ◽  
Rui Cruz ◽  
◽  
◽  
...  
Keyword(s):  
International Trade ◽  
Research Question ◽  
Main Research ◽  
Trade Relations ◽  
China Trade ◽  
Economic Forces ◽  
The Us ◽  
Physical Forces ◽  
The Government ◽  
Chinese Company

This article aims to study international trade specificity and the main activities of Chinese companies in US markets. It addresses the strategic tools of companies and their application in a global and very competitive market, framed by public policies and governments' strategies. It explores the principles of the internal and external environment of the countries. The main research question is: what are the dimensions of a model to potentiate the US–China Companies? The principal methodology used in this research was a literature review, and the analysis was based on the papers that research the theme US and China trade relations. The findings reflect that international trade is conditioned by the government politics, and there are several other obstacles that a US or Chinese company need to overcome: (a) economic forces; (b) technological forces; (c) political–legal forces; (d) sociocultural forces; and (e) physical forces.

scholarly journals Chinas Entry Into WTO And Its Impact On EU

2011 ◽  
Vol 3 (9) ◽  
Author(s):  
Ki Hee Kim
Keyword(s):  
Trading Partner ◽  
Trade Barriers ◽  
Trade Reforms ◽  
Trade Relations ◽  
Market Opening ◽  
The Third ◽  
China Trade ◽  
Bilateral Agreement ◽  
The World ◽  
The Eu

The EU and China on May 19, 2000 reached a bilateral agreement toward Chinas membership in the WTO. The agreement brings China ever closer to completing its 14-yeas-old accession bid. China and the EU, two of the biggest markets in the world, have a everything to gain by deepening their commercial tides. Since 1978, EU and China trade has increased more than l0-fold. China is now the third largest important non-European trading partner. A strengthening of trade relations between China and EU is happening at the multilateral and bilateral level. Multilaterally, the EU is one of the keenest advocates of Chinas early accession to the WTO. Bilaterally, the EU supports Chinas economic and trade reforms, while encouraging further market opening. What is the EUs view on Chinas WTO accession? How does Chinas entry into WTO impact the EU? How will China benefit from joining the WTO? How does Chinas entry into WTO impact the EU? Will China comply with the agreements committed to EU? The purpose of this research is to evaluate trade performance, problems, current disputes, and other trade barriers between EU and China.

The Future of ASEAN–China Trade Relations

2017 ◽  
pp. 187-209
Author(s):  
Kee-Cheok Cheong ◽  
Siew-Yong Yew ◽  
Chen-Chen Yong
Keyword(s):  
Trade Relations ◽  
China Trade ◽  
The Future

Methodological problems of BEPS analysis

2021 ◽  
Vol 2021 (6) ◽  
pp. 55-71
Author(s):  
Olga IVANYTSKA ◽  
◽  
Tetiana KOSCHUK ◽  
Keyword(s):  
Multinational Corporations ◽  
Empirical Studies ◽  
Limited Information ◽  
Sources Of Information ◽  
Economic Activities ◽  
Effective Tax Rate ◽  
Profit Shifting ◽  
Tax Rate ◽  
High Profit ◽  
Profit Rates

The article is devoted to the issues of the methodology of the analysis of the base erosion and profit shifting (BEPS) for the development of managerial approaches to counteracting these destructive phenomena in Ukraine. Eleven types of data sources identified by the OECD that can be used for BEPS analysis are determined. It is shown that most sources of information for the purposes of analyzing the scale and effects of BEPS have significant limitations: their absence or limited representativeness in some countries; regulatory restrictions on access to data; lack of most financial data to reflect the activities of multinational corporations (MNCs). The indicators that testify to BEPS or dangerous phenomena of financial abuse, which are reflected in reporting, are analyzed, namely: 1) disconnect between financial and real economic activities; 2) high profit rates of low-taxed affiliates of top global MNCs; 3) high profit rates of MNC affiliates in lower-tax locations; 4) MNCs vs. "comparable" non-MNC effective tax rate differentials; 5) profit shifting through intangibles; 6) profit shifting through interest. It is proved that for Ukraine the calculation of a number of indicators can be complicated due to the delay in the publication of official data; lack of appropriate statistical reporting. In general, indicators show that they provide limited information about financial transactions and cannot reliably relate any changes and their reflection to BEPS. Therefore, the implementation of measures to combat BEPS should be based not only on the results of calculations of OECD indicators, but also on other empirical studies that provide reliable information on the development of income transfer between countries.

Globalization and U.S. Corporate Tax Policies: Evidence from Import Competition

2021 ◽  
Author(s):  
Tao Chen ◽  
Chen Lin ◽  
Xiang Shao
Keyword(s):  
Natural Experiment ◽  
Transfer Pricing ◽  
Manufacturing Firms ◽  
Import Competition ◽  
Tax Policies ◽  
Corporate Tax ◽  
Trade Relations ◽  
Trade Dispute ◽  
China Trade ◽  
Tax Reduction

This paper studies how globalization affects the corporate tax policies of U.S. manufacturing firms. Using U.S.-granting China Permanent Normal Trade Relations as a quasi-natural experiment, we find a significant increase in tax reduction activities for firms facing higher exposure to Chinese imports. The effect is more pronounced for firms with higher managerial slack. We also find that the effect is stronger for firms in less diversified products market and faster changing industries. We also show that U.S. firms facing higher Chinese import competition are more likely to engage in other tax-motivated activities: acquisition of subsidiaries in low-tax regions and suspected transfer pricing. Furthermore, we explore the 2017 tax cut and the recent U.S.-China trade dispute and find that firms engage less in tax reduction activities after the 2017 tax cut and after the tariff increase for Chinese imports. This paper was accepted by Kay Giesecke, finance.

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