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Jo Van Biesebroeck

KU Leuven

Jo Van Biesebroeck is professor of economics at KU Leuven, Belgium, and Research Fellow at Centre for Economic Policy Research (CEPR), London, UK. His research interests are in international trade, industrial organization and economic development, and he has substantially contributed to the study of firm performance. He holds a PhD in Economics from Stanford University, USA.
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publication
Testing Predictions on Supplier Governance from the Global Value Chains Literature

A vast empirical literature analyzes the determinants of the make-or-buy decision, but firms also need to decide how to organize their supplier relationships when they choose to buy. The global value chains framework provides predictions on the nature of buyer-supplier collaboration. We use a unique transaction-level dataset of outsourced automotive components to study carmakers’ choice between four distinct types of supplier governance: market, captive, relational, or modular. The theory formulates predictions based on three characteristics: the complexity or contractibility of a transaction, the capabilities of suppliers, and how objectively codifiable performance requirements are. The results illustrate that sourcing relationships differ systematically and that proxies for the three characteristics have effects in line with the theory.

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publication
Functional upgrading in China's export processing sector

Functional upgrading occurs when a firm acquires more sophisticated functions within an existing value chain. In this paper, we analyze if there is evidence of this type of upgrading in China's export processing regime by investigating dynamics in the relative prevalence of Import & Assembly (IA) versus Pure Assembly (PA) processing trade over the period 2000–2013. Firms in both regimes provide similar manufacturing services to foreign companies, but IA firms also conduct the sophisticated tasks of quality control, searching, financing and storing imported materials. Consistent with a trend of functional upgrading, we show that the share of IA trade in total processing trade has increased rapidly during the period 2000–2006, both overall and within product categories. Furthermore, we find that this trend has gone hand in hand with improvements in a sector's labor productivity and unit values. Against expectations, we find that this process has slowed down notably during the period 2006–2013.

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publication
WTO Accession and Performance of Chinese Manufacturing Firms

We examine the effects of trade liberalization in China on the evolution of markups and productivity of manufacturing firms. Although these dimensions of performance cannot be separately identified when firm output is measured by revenue, detailed price deflators make it possible to estimate the average effect of tariff reductions on both. Several novel findings emerge. First, cuts in output tariffs reduce markups, but raise productivity. Second, pro-competitive effects are most important among incumbents, while efficiency gains dominate for new entrants. Third, cuts in input tariffs raise both markups and productivity. We highlight mechanisms that explain these findings in the Chinese context. (JEL D24, F13, L25, L60, O14, P31, P33)

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