Research | Xu Sichuang: Bilateral Economies of Scope

Release time：15 May 2025

In global economic integration, the import and export activities of businesses play a vital role in economic growth. However, today’s complex and variable international trade environments and costly international transactions have impeded some firms’ global expansion.

Bilateral Economies of Scope, a collaborative research by Professor Xu Sichuang from the School of Management and Economics (SME), The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen); Professor Li Yao (Amber) from The Hong Kong University of Science and Technology; Professor Stephen R. Yeaple from the Pennsylvania State University; and Professor Zhao Tengyu from Fudan University, proposes a significant complementarity between firms’ export and import decisions in specific foreign markets. Such complementarity shows that firms’ simultaneous export and import in a given market significantly reduce export and import fixed costs. The market-specific bilateral economies of scope are common in international trade and of great significance to firms’ development and their import and export decision-making. The research results have enriched the literature related to corporate internationalization, trade policy, and corporate performance, lent a fresh perspective to understand how firms allocate resources between different markets, chartered new paths for future research, and provided a meaningful reference for relevant institutions to formulate more effective trade policies. The research paper was published in the Review of Economics and Statistics, an authoritative journal in international economics.