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Spatial Exporters

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  • Fabrice Defever
  • Benedikt Heid

    ()

  • Mario Larch

Abstract

In this paper, we provide evidence that expanding firms tend to serve new markets which are geographically close and culturally related to their prior export destinations. We quantify the impact of this spatial pattern using a Chinese firm-level data set. To ensure an exogenous set of potential new destinations (25 EU countries, US and Canada) and an exogenous timing of entry, we focus on firms that benefited from the abrupt end of the textile quota restrictions in 2005. Controlling for firm-product and destination specific effects and accounting for possible multiple new export destinations we show that the probability to export to a country increases by 15 to 38 percent for each prior export destination with a geographical or cultural link with this country.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-12/cesifo1_wp3672.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3672.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3672

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Related research

Keywords: export destination choice; spatial correlation; firm-level customs data; MFA/ATC quota removal;

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References

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  1. Armenter, Roc & Koren, Miklós, 2010. "A Balls-and-Bins Model of Trade," CEPR Discussion Papers 7783, C.E.P.R. Discussion Papers.
  2. Khandelwal, Amit & Schott, Peter K. & Wei, Shang-Jin, 2012. "Trade liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters," CEPR Discussion Papers 9246, C.E.P.R. Discussion Papers.
  3. Emek Basker, 2003. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Labor and Demography 0303002, EconWPA, revised 11 Mar 2005.
  4. Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2001. "Market Entry Costs, Producer Heterogeneity, and Export Dynamics," NBER Working Papers 8629, National Bureau of Economic Research, Inc.
  5. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2010. "Multiple-Product Firms and Product Switching," American Economic Review, American Economic Association, vol. 100(1), pages 70-97, March.
  6. Hiau Looi Kee & Kala Krishna, 2008. "Firm-Level Heterogeneous Productivity and Demand Shocks: Evidence from Bangladesh," American Economic Review, American Economic Association, vol. 98(2), pages 457-62, May.
  7. Irene Brambilla & Amit K. Khandelwal & Peter K. Schott, 2010. "China's Experience under the Multi-Fiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)," NBER Chapters, in: China's Growing Role in World Trade, pages 345-387 National Bureau of Economic Research, Inc.
  8. Bloom, Nicholas & Draca, Mirko & Van Reenen, John, 2011. "Trade induced technical change? The impact of Chinese imports on innovation, IT and productivity," CEPR Discussion Papers 8236, C.E.P.R. Discussion Papers.
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  11. Francois, Joseph & Woerz, Julia, 2009. "Non-linear panel estimation of import quotas: The evolution of quota premiums under the ATC," Journal of International Economics, Elsevier, vol. 78(2), pages 181-191, July.
  12. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
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  14. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 225-38, January.
  15. Ana Cristina Molina, 2010. "Are Preferential Agreements Stepping Stones To Other Markets?," IHEID Working Papers 13-2010, Economics Section, The Graduate Institute of International Studies.
  16. Chaney, Thomas, 2011. "The Network Structure of International Trade," CEPR Discussion Papers 8240, C.E.P.R. Discussion Papers.
  17. Costas Arkolakis & Marc-Andreas Muendler, 2010. "The Extensive Margin of Exporting Products: A Firm-level Analysis," NBER Working Papers 16641, National Bureau of Economic Research, Inc.
  18. Carolyn L. Evans & James Harrigan, 2004. "Tight Clothing: How the MFA Affects Asian Apparel Exports," NBER Working Papers 10250, National Bureau of Economic Research, Inc.
  19. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
  20. Thierry Mayer & Keith Head & John Ries, 2008. "The Erosion of Colonial Trade Linkages after Independence," Working Papers 2008-27, CEPII research center.
  21. Fabrice Defever, 2012. "The spatial organization of multinational firms," Canadian Journal of Economics, Canadian Economics Association, vol. 45(2), pages 672-697, May.
  22. Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June.
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  24. Haites, Erik F & Rose, Adam, 1996. "Editors' introduction," Energy Policy, Elsevier, vol. 24(10-11), pages 857-861.
  25. Daniel X. Nguyen, 2010. "Demand Uncertainty: Exporting Delays and Exporting Failures," Discussion Papers 10-17, University of Copenhagen. Department of Economics.
  26. Morales, Eduardo & Sheu, Gloria & Zahler, Andrés, 2011. "Gravity and extended gravity: estimating a structural model of export entry," MPRA Paper 30311, University Library of Munich, Germany.
  27. repec:stn:sotoec:1003 is not listed on IDEAS
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Citations

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Cited by:
  1. Juan de Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2013. "The dynamics of firms’ export portfolio: A network analysis with an application to Mexico and Bulgaria," Working Papers 1316, Department of Applied Economics II, Universidad de Valencia.
  2. Jaan Masso & Priit Vahter, 2012. "The Role Of Product Level Entry And Exit In Export And Productivity Growth: Evidence From Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 86, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  3. Jaan Masso & Priit Vahter, 2011. "Exporting And Productivity: The Effects Of Multi-Market And Multi-Product Export Entry," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 83, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  4. Morales, Eduardo & Sheu, Gloria & Zahler, Andrés, 2011. "Gravity and extended gravity: estimating a structural model of export entry," MPRA Paper 30311, University Library of Munich, Germany.
  5. Lili Wang & Yong Zhao, 2013. "Does Experience Facilitate Entry into New Export Destinations?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(5), pages 36-59, 09.

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