The “International:Trade Research Trend”section aims to release the latest research findings in the field of international trade published in authoritative Chinese journals such as “Social Sciences in China”, “Economic Research Journal”,“Journal of Management World”,“China Economic Quarterly" and “The Journal of World Economy”. It strives to provide everyone with timely, accurate, and high-quality front-line dynamics in the field of international trade.

Journal of World Economy

A New Governance Mechanism for Enterprises' Global R&D Network: A Case Study on Technical Expatriates of Headquarters to Promote the Cross-border Integration of Tacit Knowledge

Tang Lu and Liu Wei

Abstract: Integrating advanced global knowledge is the key for emerging market multinational enterprises (EMNEs) to build sustainable global competitive advantage. However, existing economic geography research often, under the implicit assumption of knowledge flow being unrestrained, simplifies it as a straightforward transfer problem, neglecting the distinctive governance challenges of tacit knowledge. As an innovative institutional arrangement, technical expatriates of headquarters can help to overcome the governance void, but its process and mechanismremain unclear. Therefore, this paper aims to explore the micro-governance process and mechanism of how technical expatriates of headquarters promote the cross-border integration of tacit knowledge. The study finds that: (1) technical expatriates of headquarters promote the crossborder integration of tacit knowledge through three processes: relational governance, cognitive governance, and content governance. (2) The three processes can be conceptualized as seven governance behaviors: linking, interacting, interpreting, converging, migrating, transforming, and reconfiguring. (3) These processes are both driven by the external environment and supported within the organization. The expatriates's choices of governance behaviors are affected by the heterogeneous environment such as geographical distance, cultural difference and technological difference. Common platform, common vision and common system shape the environment and promote the smooth development of tacit knowledge cross-border integration process. Themain contribution of this paper is to build a comprehensive governance framework of external driving, action mechanism and internal support of headquarters technical expatriates to promote the cross- border integration of tacit knowledge, to help the governance of the global innovation network of EMNEs, and to deal with and solve the upgrading and transformation of

EMNEs under technology decoupling.

Keywords: technical expatriates of headquarters; tacit knowledge; governance void; emerging market multinational enterprises; knowledge integration

Research data: The main sources of data come from first-hand sources such as direct observation, archival documents, and semi-structured interviews.

Research Method: Longitudinal Single Case Study Method

Research contribution: Contribution to the study of knowledge integration in the field of international business: Firstly, focusing on tacit knowledge has enriched the research on knowledge integration in multinational enterprises. The term "knowledge" is widely used in existing research on cross-border knowledge integration (Bassett et al., 2018; Grant&Fien, 2022). Although discussions have focused on the cross-border integration of knowledge on a global scale, research on tacit knowledge is still in its infancy (Thomas&Gupta, 2022). Based on the characteristics of tacit knowledge (Ferrer Serrano et al., 2021), this article proposes that the global tacit knowledge integration of multinational corporations is not only a matter of transfer, but also a lack of interactive governance. The need to overcome governance gaps caused by geographical distance, cultural differences, and technological differences, and promote social interaction between knowledge holders and receivers, has enriched discussions on tacit knowledge in the field of cross-border knowledge integration. Secondly, focusing on the headquarters' technical expatriates, it has contributed to the research on the mechanism of cross-border integration of tacit knowledge across borders. Although literature on the integration of tacit knowledge has delved into the essence and process of its interaction and practice (Hajimikel, Tsokas, 2019), and proposed that globally mobile knowledge workers participate in the cross-border integration of tacit knowledge (Ferreira et al., 2022), it is still unclear how it specifically works. This article describes the micro mechanism of the promotion of cross-border integration of tacit knowledge by headquarters technical expatriates, and proposes seven governance mechanisms for promoting individual cross-border interaction and tacit knowledge cross-border integration, including linking, linkage, interpretation, convergence, migration, transformation, and reconstruction. It expands the current research on the mechanism of expatriates promoting cross-border integration of tacit knowledge.

Contribution to the study of expatriates: Firstly, it enriches the connotation of expatriates and their role in cross-border integration of tacit knowledge. This paper focuses on the technical expatriates of the headquarters who are continuously dispatched on a large scale, and expands the main perspectives of scholars who focus on the expatriates of senior executives (Guo et al., 2018), the returnees of highly skilled immigrants (Roberts, Bimish, 2017), and the expatriates of the headquarters (Kislin et al., 2023), enriching the connotation of expatriates. And by analyzing the mechanism of the role of headquarters technical expatriates, the theory of expatriates has been enriched in the context of cross-border integration of tacit knowledge. Secondly, establishing a comprehensive theoretical framework of individuals, organizations, and environments has contributed to the mechanism research of expatriates. Previous studies often consider individual actors and organizational environment as two discrete dimensions (Pedersen et al., 2019). This article synthesizes the governance behavior choices of headquarters technical expatriates in different time scenarios and finds that the governance role of expatriates is influenced by external environment and supported by internal organizational factors. And expatriates play different knowledge roles in different governance processes, proposing a comprehensive theoretical framework of external drivers, mechanisms, and internal support, expanding existing research on expatriates.

Contribution to research on network governance: Firstly, it enriches the relevant research on participant governance. Existing research has explored the concept and governance behavior of participatory governance in a beneficial way (Marcus&Buey, 2012; Profan&Kenis, 2007). On this basis, this article finds that headquarters technical expatriates, as network participants, can utilize the advantages of network structure for participant governance, and play a governance role in the process of implicit knowledge cross-border integration from three levels: relationship, cognition, and content, expanding the connotation of existing network participants and contributing to the research of participant governance mechanisms. Secondly, it has contributed to the study of the connotation of governance holes. Yawenpa and Velikangas (2016) proposed the existence of governance holes in heterogeneous networks. On this basis, this article focuses on the global R&D network of emerging multinational corporations, proposing that governance holes stem from technological differences, cultural differences, and geographical distance, enriching the connotation of governance holes in the context of emerging multinational corporations.

JEL Classification: M15

China Economic Quarterly

VAT Rebate Efficiency and Firm Export Performance

LU Bing, MA Hong

Abstract: Using-a unique panel of Chinese firms with export and rebates information, we explore theimpact of VAT rebate effiiency on firm export. Results show that the rebate efficiency improvement substantially promotes firm export sales. Decreasing delay ratio by 10 percentage points can cause about 15.3% increase in export value. Furthermore, we find the mismatch pattern in allocating rebates: exporters with tighter financiaI constraints respond more elastically to rebates delay, yet they are also more likely to have a higher delay ratio. In such case, locagovernments could premote export by optimizing the rebate allocation under local fiscal constraint.

Keywords: VAT rebate delay; financial constraint; local fiscal constraint

Research data: National tax survey data jointly collected and compiled by the Ministry of Finance and the State Administration of Taxation; Export product data of enterprises in the customs database.

Research Method: Empirical Analysis

Research contribution: Firstly, compared with articles studying trade policies such as value-added tax export tax rebates, this article further considers the delay and distribution of export tax rebates based on the export tax rebate rate, and points out that reducing export tax rebate delays or optimizing export tax rebate distribution will also significantly promote enterprise exports. Therefore, in order to achieve export growth, in addition to increasing the export tax rebate rate, it is also possible to reduce export tax rebate delays or optimize tax rebate distribution. Secondly, compared with literature on financing constraints and exports, this paper finds that delayed export tax rebates have a more significant impact on enterprises with financing constraints. Therefore, by prioritizing the allocation of tax refund funds to enterprises with severe financing constraints, it can promote total exports. From this perspective, optimizing the distribution of export tax rebates is similar to improving the financial system. Thirdly, compared with the literature on policy implementation efficiency, this article found the phenomenon of resource mismatch in China's export tax rebate. Enterprises with more severe financing constraints need timely export tax refunds, but the results show that these enterprises have a higher degree of delay in export tax refunds. Therefore, by optimizing the allocation of export tax rebates, local governments can promote the export of enterprises and improve resource allocation efficiency without increasing tax rebate funds.

JEL Classification: F14，H25,010

How Trade Policies Affect Economic Growth and Social Welfare in large Countries?-A Theoretical Analysis

WANG Yong;JIANG Shenzhe;LI Xinze

Abstract: How does trade conflict between two large countries affect their long run output and wel-fare? We develop a dynamic model and find that: when a developed country(N) imposes a sudden tariff on a developing country (S), in the short run it raises its own output and hurts the output and welfare of country S, but the long-run impact depends on the industrial structure of country S. If country S succeeds in industrial upgrading, tariff will raise the capital return in country S and facilitates its endowment-driven industrial upgrading; otherwise, tariff will hurt output and welfare of country S.

Keywords: trade frictions;industrial upgrading;social welfare

Research methods: theoretical models, empirical analysis

Research contribution: This article has two main inspirations: (1) How do trade frictions between major countries dynamically affect the industrial structure, output level, and welfare level of both sides? There is a lack of research on long-term effects in academic literature. This article explores the dynamic effects of tariffs through theoretical modeling analysis, and shows the inconsistency between the long-term and short-term effects of tariffs after considering the endogenous dynamic accumulation of factor endowments. In addition, this article also empirically tested some theoretical predictions using Japan US trade data and China US trade data, and the results strongly validated the conclusions of the model. (2) The main innovation of this article in modeling technology lies in constructing and solving a large country trade and growth model that is economically interdependent and dynamically evolving. The existing models for studying dynamic economic changes within the HO model framework often rely on extreme assumptions. For example, Ventura's (1997) model assumes that the production functions of two sectors are such that one sector only requires labor for production, while the other sector only requires capital for production, thereby ensuring that the endogenous industrial and trade structures of the two countries remain unchanged, and the factor prices of the two countries remain equal. However, this approach cannot fully discuss the issues of endogenous industrial upgrading and trade structure changes. For example, Bajona and Kehoe's (2010) model assumes that it can only be solved under the condition of complete depreciation of capital, and the conclusion mainly relies on numerical solution rather than analytical characterization, while Caliendo's (2010) analytical characterization is very complex and the conclusion is uncertain. Moreover, this is all based on the assumption of simple free trade, without considering the impact of sudden trade policies. The model presented in this article avoids extreme assumptions in these important economic dimensions and constructs a more general theoretical model to explore the long-term dynamic impact of trade tariffs on the factor endowments and industrial structures of both countries. At the same time, non critical assumptions are further simplified, such as drawing on the technical assumptions of the Leontief production function in Ju et al. (2015), a classic model of new structural economics. This significantly improves the tractability of the problem and advances the depth of analysis. Our work, firstly, may provide a new perspective for future economists to consider traditional trade policies, exchange rate policies, and industrial chain policies, that is, changes in relevant price signals not only affect current resource allocation, but also through the dynamic accumulation of factor endowments. Generate long-term impacts. Secondly, the inconsistency between the long-term and short-term impacts of this tariff provided in this article can also provide research materials for relevant empirical and quantitative studies. Finally, this article provides some theoretical references on how China can respond to trade policy risks and strengthen its own industrial upgrading in the current complex and ever-changing international environment.

JEL Classification: F13,024,041

Input Tariff Phase Out and Firm Investment Dynamics--Evidence from China’s WTO Accession

FENG Ling;LIU Xiaoyi;YUAN Fan

Abstract: We investigate how the commitments of trade agreement on bound rates of future tariff on imported inputs affect firm investment decisions ttheoretically and empiricallly. Theoretical analysis shows that the unanticipated tariff cut encourages the investment of downstreamfirms, while the anticipated tarliff cut depresses firms' current investment but expaids their future invesstinent, and it may not have such effects on the intermediate inputs. The empirical analysis based on China' s WTO accession provides supporting evidence. This study expands the scope of research on the news sshocks to the field of tradle policy research in China for the first time.

Keywords: tariff phase-out; bound tariff; firm iinvestment

Research data: The enterprise identification code, enterprise name, and various financial indicators are sourced from the Chinese industrial enterprise database; Trade amount, quantity, type, trading party identity information, product HS9 digit code category, etc. are obtained from customs data; The tariff data includes China's most favored nation import tariffs and the annual binding tariff rates promised in the WTO tariff reduction schedule, which are compiled according to the Protocol on the Accession of the People's Republic of China and its annexes.

Research methods: theoretical models; Empirical analysis

Research contribution: Firstly, the most relevant research to this article is the literature on the expected impact of trade policy changes. Similar to existing literature, this article captures the expected decline and subsequent rebound of economies after the signing of tariff agreements, providing an explanation for the slow adjustment behavior of economies accompanying trade liberalization. The difference lies in: firstly, this article focuses on the impact of expected tariff reductions on input products on downstream enterprises, rather than the tariff reduction arrangements for the products themselves; Secondly, this article focuses on intertemporal arrangements for investment, rather than the import trade behavior of enterprises; Thirdly, this article focuses on the impact of trade agreements on the Chinese economy, which is rarely studied in existing literature. Secondly, the findings in this article regarding the impact of expectations on economic decision-making can also contribute to the literature on news shocks. Unlike a large number of literature that focuses on the contribution of actual tariff reductions to the Chinese economy, this article expands the research scope of news shocks to the field of China's trade policy research, which helps to understand the micro and macro effects of China's trade policy. In addition, this article is also related to the study of the delayed effects of trade agreements. Unlike existing literature, this article conducts research from the perspective of expected tax reductions on inputs and uses enterprise level data to point out that the trade delay effect may also come from downstream enterprises' adjustments in investment decisions. Finally, research on the transition period has significant practical implications for guiding China's trade practices. The research in this article indicates that although trade concession policies are expansionary, the transition period of trade concessions has the attributes of short-term tightening and long-term expansion. This discovery provides more comprehensive considerations for policy makers to negotiate and formulate appropriate tax reduction agreements, which is not only conducive to a comprehensive understanding of the WTO's contribution to the Chinese economy, but also helps to understand and estimate the impact of trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) on the Chinese economy.

JEL Classification: F10,F40,G31

The Journal of World Economy

The Puzzle of the Excessive Export Market Exit of Firms with Specific Import Market Experience

Wei Hao; Tu Yue

Abstract: Excessive export market exit remains an unsolved puzzle. It is now widely acknowledged that international experience contributes to the survival of exports and mitigates export market exit. This study comprehensively explores the effect that a firm’s market-specific import experience has on export market exit. Using Chinese customs data from between 2000 and 2016, on the one hand, the paper empirically finds that import experience increases the likelihood of an exporter’s exit from the export market, which at first glance appears to be counterintuitive; on the other hand, it verifies the following three contrasting but not mutually exclusive mechanisms. (i) The market learning mechanism creates a diminishing impact; (ii) the sunk cost reduction mechanism creates an increasing impact through both the reverse hysteresis and trial-and-error effects; and (iii) the import-export market overlapping mechanism-a newly identified mechanism in the paper-has a decreasing impact through the risk hedging effect, and an increasing impact through the risk amplifying effect, with the former dominating. Further, it uncovers some heterogeneous and synergic effects of the import experience. The study findings revitalise the understanding of the import experience and export market exit, and provide new insights to exporters on how to make the most of import experiences to promote exports and diversify risk.

Key words: import market experience, export market exit, information barriers, sunk cost, importexport market overlapping

Research data: The sample data comes from the Chinese Customs database from 2000 to 2016

Research Method: Empirical Analysis

Research contribution: (1) Discovered the characteristic fact that Chinese enterprises with import experience in a specific market have a higher probability of exiting from that market, and provided theoretical mechanisms and empirical evidence for understanding this phenomenon. In addition to the mechanism of reducing information barriers, this article also analyzes the lag effect of reverse exports from the perspective of reducing sunk costs, and proposes the risk hedging effect and risk superposition effect caused by the same period overlap mechanism of import and export markets, expanding the channels of existing research on the impact of imports on the export dynamics of enterprises. (2) The existing literature on the exit of enterprises from export markets is not sufficient. This article provides a new explanation for the frequent exit behavior of enterprises from the perspective of import market experience. This study indicates that the exit behavior of enterprises from export markets does not necessarily mean export failure. It may be due to the reduction of sunk export costs, which allows enterprises to flexibly adjust their export markets or actively engage in export trial and error. This study is beneficial for us to have a more comprehensive and dialectical view of exit behavior from export markets. (3) Against the backdrop of weak external demand and declining orders, stabilizing and expanding the export market has become an important task for China's foreign trade work. This study provides important insights and policy references for export enterprises on how to assess the situation, utilize import market experience to better expand their export markets, avoid external market risks, and optimize their export market layout.

JEL codes: F10, F14