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Industrial agglomeration and firm exports: Micro-evidence based on input-output linkages

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  • Bao, Xiaohua
  • Gao, Lei
  • Jin, Yu
  • Sun, Jin

Abstract

Related research uncovers the effects of industrial agglomeration on firm exports through various channels. However, relatively little attention has been paid to the effects of vertical agglomeration. This paper investigates whether and how industrial agglomeration affects firm exports, based on input-output linkages. Using Chinese firm-level data from 2000 to 2011, we find that horizontal agglomeration increases firms' probability of exporting and sales by improving contract enforcement; upstream agglomeration increases firms' probability of exporting through intermediate inputs, while downstream agglomeration does the opposite through marketing channels. Moreover, compared to horizontal agglomeration only working on gross exports, vertical agglomeration has significant effects on the domestic content of export. We also find that the effect of industrial agglomeration on firm exports varies according to the firm ownership and its export status.

Suggested Citation

  • Bao, Xiaohua & Gao, Lei & Jin, Yu & Sun, Jin, 2023. "Industrial agglomeration and firm exports: Micro-evidence based on input-output linkages," Economic Modelling, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:ecmode:v:119:y:2023:i:c:s0264999322003601
    DOI: 10.1016/j.econmod.2022.106123
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    More about this item

    Keywords

    Industrial agglomeration; Input-output linkages; Firm exports; Global value chain (GVC);
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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