Outsourcing Tariff Evasion : a New Explanation for Entrepôt Trade
نویسنده
چکیده
Traditional explanations for indirect trade through an entrepôt focus on savings in transport costs and the role of specialized agents in processing and distribution. We provide an alternative perspective based on the potential for entrepôts to facilitate tariff evasion. Using data on direct exports to mainland China and indirect exports via Hong Kong SAR, we find that the indirect export rate rises with the Chinese tariff rate, despite the absence of any legal tax advantage to sending goods via Hong Kong SAR. We present several robustness tests to rule out plausible alternative hypotheses based on existing explanations for entrepôt trade.
منابع مشابه
Beyond Tax Evasion and Misreported Trade: Global Evidence on Trade Agreements, Accounting Standards, and Organized Crime
In contrast to prior disaggregated product level studies on tariff evasion which have focused on select country pairs, we develop a model that allows us to consistently estimate average tariff evasion effects on aggregate bilateral trade data. This has two distinct advantages over prior work. We are able to obtain a more general test for average tariff evasion effects across a large number of c...
متن کاملOutsourcing and Optimal Trade Policy
Outsourcing under incomplete contracts tends to generate too little investment that is specific to the bilateral relationship. In a model where there are otherwise no social motives for protection, we show that protection is helpful when the buyer trades customized inputs with a specialized domestic supplier while also buying standardized inputs from the world market. In that case, a tariff wor...
متن کاملDeterminants and pervasiveness of the evasion of custom duties
Evasion of custom duties is a serious concern in developing countries, where tariff receipts are often important while their collection is problematic. We study theoretically and empirically the determinants of evasion across countries and products, based on a systematic analysis of discrepancies in trade declarations when they are available for both partners. We conclude that evasion of custom...
متن کاملLaw, Social Responsibility, and Outsourcing
Previous research into enforcement of law and corporate social responsibility mostly assumes that the vertical structure of the entities causing harm is exogenous. By outsourcing, the source of harm may avoid some liability and responsibility, while losing direct control over the evasive actions that cause harm. Here, we analyze the trade off between avoidance of liability and control over evas...
متن کاملAvoidance Behaviors of Exporters and Importers: Evidence From the U.S.-China Trade Data Discrepancy*
Since the late 1990s, reported U.S. imports from China and Hong Kong have regularly and increasingly exceeded reported exports of China and Hong Kong to the United States. This discrepancy, which is not caused by re-exporting through Hong Kong, varies by product categories, and in some cases takes the opposite sign. In this paper, we focus on China’s direct exports to the United States. Using a...
متن کامل