Trade liberalisation and domestic brands: Evidence from China's accession to the WTO |
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| Authors: | Xinghua Deng Ran Jing Zheng Liang |
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| Institution: | 1. School of International Business, Southwestern University of Finance and Economics, Beijing, China;2. School of International Trade and Economics, University of International Business and Economics, Beijing, China;3. School of Public Policy and Management, China Institute of Science and Technology Policy, Tsinghua University, Beijing, China |
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| Abstract: | In this paper, we examine how trade liberalisation affects firms' branding behaviours. We investigate this question with China's accession to the WTO in late 2001. We find that firms in sectors with large import tariff reductions discontinue more trademarks. Meanwhile, these firms file more trademark applications and their total number of effective trademarks increases after trade liberalisation. This growth in trademarks is mainly driven by large firms, as measured by the number of employees. In fact, small firms' applications and effective trademarks decline during trade liberalisation. It is also found that trademark applications are mainly filed for the traditionally non-dominant products of industries. We provide a conceptual model that incorporates the channels through which both passive and active responses occur. |
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| Keywords: | China import tariff trademarks WTO |
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