Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers
AbstractIn 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 InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2011063.
Date of creation: 22 Dec 2011
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foreign export spillovers; difficult markets; China;
Other versions of this item:
- Florian Mayneris & Sandra Poncet, 2011. "Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers," Working Papers 2011-32, CEPII research center.
- Florian MAYNERIS & Sandra PONCET, 2011. "Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011041, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- F1 - International Economics - - Trade
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
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