China Spillovers: Aggregate and Firm-Level Evidence
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Summary:
We estimate the impact of distinct types of slowdowns in China on countries and firms globally. First, we combine a structural vector autoregression framework with a broad-based measure of domestic economic activity in China to distinguish supply versus demand components of Chinese growth. We then use local projection models to assess the responses to such shocks of GDP growth (revenue) in other countries (firms). We find that: (i) both supply and demand slowdowns are associated with substantial declines in partner GDP and firm revenue; (ii) negative spillovers are larger in countries and firms with stronger trade links with China; and (iii) spillovers from Chinese supply shocks are stronger than spillovers from demand shocks, both at the aggregate- and firm-level.
Series:
Working Paper No. 2023/206
Subject:
Consumption Econometric analysis Economic theory Exports Financial sector policy and analysis International trade National accounts Spillovers Structural vector autoregression Supply shocks
Frequency:
regular
English
Publication Date:
October 17, 2023
ISBN/ISSN:
9798400257353/1018-5941
Stock No:
WPIEA2023206
Format:
Paper
Pages:
57
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