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Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers

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  • MAYNERIS, Florian

    ()
    (Université catholique de Louvain, CORE & IRES, B-1348 Louvain-la-Neuve, Belgium)

  • PONCET, Sandra

    ()
    (Paris School of Economics, Université Paris 1 and CEPII)

Abstract

In this study, we explore how the intensity of foreign export spillovers in China varies depending on the difficulty of entry on export markets. We rely on different proxies to define what a "difficult" country is and we find that the presence of surrounding foreign exporting firms helps domestic ones to start exporting, especially when destination countries are difficult. While on average exposure to foreign exporters is associated with a 10% increase of the probability that domestic firms from the same province start exporting the year after, the figure is around 50% higher when the targeted destination country is identified as difficult. Our results are consistent with the idea that exposure to foreign exporters helps to reduce the fixed cost of creating new trade linkages. Our finding hence suggests that the increasing presence of foreign exporting firms in China might contribute to the diversification of Chinese domestic firms' exports towards more difficult and previously inaccessible destinations.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2011063.

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Date of creation: 22 Dec 2011
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Handle: RePEc:cor:louvco:2011063

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Keywords: foreign export spillovers; difficult markets; China;

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  1. Pamina Koenig & Florian Mayneris & Sandra Poncet, 2009. "Local Export Spillovers in France," Working Papers 2009-18, CEPII research center.
  2. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521887427.
  3. Luis Araujo & Giordano Mion & Emanuel Ornelas, 2012. "Institutions and export dynamics," Working Paper Research 220, National Bank of Belgium.
  4. Matthieu Crozet & Pamina Koenig & Vincent Rebeyrol, 2008. "Exporting to Insecure Markets: a Firm-Level Analysis," Working Papers 2008-13, CEPII research center.
  5. Hess, Wolfgang & Persson, Maria, 2010. "The Duration of Trade Revisited. Continuous-Time vs. Discrete-Time Hazards," Working Papers 2010:1, Lund University, Department of Economics.
  6. Duranton, Gilles & Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2010. "The Economics of Clusters: Lessons from the French Experience," OUP Catalogue, Oxford University Press, number 9780199592203, October.
  7. Salvador Barrios & Holger Goerg & Eric Strobl, 2003. "Explaining Firms' Export Behaviour: R&D, Spillovers and the Destination Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 475-496, 09.
  8. Sebastian Krautheim, 2007. "Gravity and Information: Heterogeneous Firms, Exporter Networks and the 'Distance Puzzle'," Economics Working Papers ECO2007/51, European University Institute.
  9. Guillaume Gaulier & Soledad Zignago, 2010. "BACI: International Trade Database at the Product-Level. The 1994-2007 Version," Working Papers 2010-23, CEPII research center.
  10. Frances Ruane & Julie Sutherland, 2005. "Foreign Direct Investment and Export Spillovers: How Do Export Platforms Fare?," The Institute for International Integration Studies Discussion Paper Series iiisdp058, IIIS.
  11. Brian Aitken & Gordon H. Hanson & Ann E. Harrison, 1994. "Spillovers, Foreign Investment, and Export Behavior," NBER Working Papers 4967, National Bureau of Economic Research, Inc.
  12. Hess, Wolfgang & Persson, Maria, 2010. "Exploring the Duration of EU Imports," Working Paper Series 849, Research Institute of Industrial Economics.
  13. Belleflamme,Paul & Peitz,Martin, 2010. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9780521681599.
  14. Wolfgang Hess & Maria Persson, 2012. "The duration of trade revisited," Empirical Economics, Springer, vol. 43(3), pages 1083-1107, December.
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Cited by:
  1. Florian Mayneris & Sandra Poncet, 2011. "French Firms at the Conquest of Asian Markets: The Role of Export Spillovers," Working Papers 2011-31, CEPII research center.

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