Further Tests of Ahn, Khandelwal, and Wei’s (2011) Model of Intermediated Trade
This study subjects Ahn, Khandelwal, and Wei’s (2011) model of intermediary trade to a series of additional tests. Using data mostly sourced independently from AKW, we demonstrate that we are able to reproduce the evidence supporting their three main predictions for Chinese exports. However, further tests reveal that these results are not robust. When we repeat the analysis underlying their first prediction with more recently available data, we estimate coefficients that are wrong-signed and significant. When we re-analyze the evidence supporting their second and third predictions, we find that the full sample results mask significant heterogeneity across Chinese regions. In many cases, key coefficients are insignificant. In a few cases, they are wrong-signed and significant. Finally, we find that there are multiple versions of a key variables measuring the number of required import documents by country, and that results are not robust across versions.