Svetlana Ledyaeva on trade diversion effects of China's VAT export rebates

Join us 10 June to hear from Svetlana Ledyaeva discuss her recent research in the WIDER Seminar Series. This Seminar will take place on Zoom. Register here.

Abstract – Trade diversion effects of China’s VAT export rebates

The study examines trade diversion effects of China`s VAT export rebates within ‘three way’ fixed effects Poisson Pseudo-Maximum Likelihood gravity model of bilateral trade flows of 192 importers and 252 exporters in 2004-2017 disaggregated at HS4 industries. The findings suggest that, on average, increase in rebate by one percent (in absolute terms) causes about one percent decrease in world import prices and enables targeted Chinese exporters to capture about one percent of foreign exporters` shares in respective international markets in monetary terms. The study further demonstrates that trade diversion effects of Chinese VAT export rebates are rather heterogenous across outside exporters and sectors.

About the speaker

Svetlana Ledyaeva is currently an Assistant Professor at the Department of Economics of Aalto University School of Business. She holds a PhD degree in Economics from Aalto University School of Business. Prior to joining the Department of Economics, she has been working at the Center for Markets in Transition of Aalto University School of Business and University of Eastern Finland. She has published papers in such journals as Economic Geography, Energy Economics, Journal of International Management and World Economy.

WIDER Seminar Series

The WIDER Seminar Series showcases recent and ongoing work on key topics in development economics. The weekly sessions held in Helsinki are open to local and visiting researchers, policy makers, and others interested in development topics. Click here to learn more.

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