Chinese Firms' Entry to Export Markets : The Role of Foreign Export Spillovers
In this paper, the effect of proximity to multinational exporters on the creation of new export linkages (the extensive margin of trade) is debated. Using panel data from Chinese customs for 1997-2007, the capacity for Chinese domestic firms to beg...
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/04/17532262/chinese-firms-entry-export-markets-role-foreign-export-spillovers http://hdl.handle.net/10986/13204 |
| Summary: | In this paper, the effect of proximity
to multinational exporters on the creation of new export
linkages (the extensive margin of trade) is debated. Using
panel data from Chinese customs for 1997-2007, the capacity
for Chinese domestic firms to begin exporting new varieties
to new markets is shown to respond positively to the export
activity of neighboring foreign firms. These spillovers are
shown to be product and country specific. This conclusion is
robust to fixed effects and instrumental variable
specifications that control for both supply and demand
shocks that could bias the estimations. The impact is
sizable. The marginal impact of product-country-specific
foreign export spillovers is five times as large as the
effect of a 10 percent increase in the demand for the
product in the destination country. Foreign export
spillovers are also shown to be primarily limited to
ordinary trade activities. Overall, our findings suggest
that even for a country with an important cost-advantage
such as China, there is room for initiatives from
policy-makers that will diffuse best practices regarding
export experience among exporters. |
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