Abstract: In recent years,China's intermediate goods trade and final product trade developed rapidly along with the implementation of a series of policies on the liberalization of trade in intermediate goods,such as reducing intermediate inputs tariff and regulatory barriers.Therefore,how trade liberalization affects the export behavior of firms has become an urgent issue to discuss.This paper studies the effect of trade liberalization of intermediate inputs on the entry and the exit of firm's export relationships using Chinese firm-level data from the National Bureau of Statistics of China (NBSC) and Chinese customs data over the period of 2000—2006.The study shows that trade liberalization of intermediate inputs promotes the entry of export relationships and inhibits the exit of export relationships.The impact of trade liberalization varies with TFP,the share of processing trade,the enterprise's ownership as well as industry factor intensity and industry competition level.The results exhibit that when the TFP and processing trade share are higher,the enterprise ownership is foreign-funded,the firm belongs to the capital(technology) intensive industries or the less competitive industries,and the declining of import intermediate goods tariff will have a stronger impact on the entry and the exit of export-relations.The empirical test of the impact mechanism shows that the liberalization of trade of intermediate goods will affect the entry and exit of export relationships through the diversification of the imported intermediate inputs,the improvement of the quality of the imported intermediate inputs and the reduction of the price of the imported intermediate inputs.These research results imply that expanding the degree of liberalization of intermediate goods trade is of great significance to promote the development of Chinese firm's export trade and enhance their international competitiveness.

Key words: Trade liberalization, intermediate inputs, export relationships, influence mechanism