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The role of FDI in domestic exporting: Evidence from China

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  • Sun, Sizhong

Abstract

This paper investigates the impact of FDI on domestic exporting firms. We show that domestic firms respond to an increase in the presence of FDI by increasing their exports even though the increase in foreign presence can drive up production costs and make the domestic market more profitable. Our test case for this hypothesis is China, where we confirm the significant positive impact of FDI on domestic firms’ exports. This finding sheds light on the massive exports and rapid inflow of foreign investment that have been observed in China in the past three decades.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 23 (2012)
Issue (Month): 4 ()
Pages: 434-441

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Handle: RePEc:eee:asieco:v:23:y:2012:i:4:p:434-441

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Web page: http://www.elsevier.com/locate/asieco

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Keywords: Export; Foreign firm; FDI; Spillovers; China;

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References

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Cited by:
  1. Lee, Hyun-Hoon & Park, Donghyun & Wang, Jing, 2013. "Different types of firms, different types of products, and their dynamics: An anatomy of China's imports," China Economic Review, Elsevier, vol. 25(C), pages 62-77.

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