Chen, Z., Erbahar, A. and Zi, Y. (2025). Made and created in China: The role of processing trade The Scandinavian Journal of Economics, 127(2):390--426.

This paper examines the main participants of China's processing trade regime {\textendash} firms that engage in both processing and ordinary exports. By matching several datasets from China, including a unique sample of transaction-level customs data with firms' branding information, we uncover three stylized facts. First, these {\textquotedblleft}mixed{\textquotedblright} firms exhibit superior performance in various margins such as revenue and physical productivity. Second, even within firms, there is a link between export mode choice and brand ownership {\textendash} own-branded products are typically exported under ordinary trade while products under other firms' brands are exported under processing trade. Third, there is a price premium associated with selling one's own-branded products. To rationalize these findings, we present a simple theoretical framework where firms with multi-attributes (i.e., {\textquotedblleft}making{\textquotedblright} and {\textquotedblleft}creating{\textquotedblright}) endogenously determine their specialization within a production network. We find evidence for the model's main prediction that firms in China intensified their branding activities when faced with favorable processing trade policies upstream.