Export volatility with trade policy uncertainty: Evidence from China*

This paper studies the effect of trade policy uncertainty on firm-level export volatility. Using data on Chinese exporters around China's WTO accession, we find that a reduction of trade policy uncertainty between China and the United States decreases the volatility of firm-level export to the United States and increases the volatility of export to the rest of the world. In the aggregate firm level, this shock in trade policy uncertainty has no significant effect on the volatility of total export or the volatility of total sales. Our finding suggests a risk-sharing effect among export destinations.