Does being embedded in RTA networks promote firm productivity? Evidence from Chinese firms

Abstract

This study examines the effect of regional trade agreement (RTA) network embeddedness on firm productivity using panel data on Chinese listed companies and global RTAs from 2010 to 2017. The findings indicate that firms with deeper embeddedness in RTA networks experience significant productivity gains, primarily driven by trade expansion and innovation. Heterogeneity analysis reveals stronger effects for firms with core RTA partners, high export intensity, and operating within the service sector. This study contributes micro-level evidence on RTA network embeddedness's role in fostering productivity within China's evolving trade landscape, highlighting the need for peripheral firms to strengthen ties with core RTA countries to reduce productivity disparities.