Chinese firms'entry to export markets : the role of foreign export spillovers
AbstractIn this paper, the effect of proximity to multinational exporters on the creation of new export linkages (the extensive margin of trade) is debated. Using panel data from Chinese customs for 1997-2007, the capacity for Chinese domestic firms to begin exporting new varieties to new markets is shown to respond positively to the export activity of neighboring foreign firms. These spillovers are shown to be product and country specific. This conclusion is robust to fixed effects and instrumental variable specifications that control for both supply and demand shocks that could bias the estimations. The impact is sizable. The marginal impact of product-country-specific foreign export spillovers is five times as large as the effect of a 10 percent increase in the demand for the product in the destination country. Foreign export spillovers are also shown to be primarily limited to ordinary trade activities. Overall, our findings suggest that even for a country with an important cost-advantage such as China, there is room for initiatives from policy-makers that will diffuse best practices regarding export experience among exporters.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6398.
Date of creation: 01 Apr 2013
Date of revision:
Tax Law; Economic Theory&Research; Foreign Trade Promotion and Regulation; Water Resources Assessment; Water Conservation;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-INT-2013-04-13 (International Trade)
- NEP-TRA-2013-04-13 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deborah L. Swenson, 2007.
"Multinationals and the Creation of Chinese Trade Linkages,"
NBER Working Papers
13271, National Bureau of Economic Research, Inc.
- Deborah L. Swenson, 2008. "Multinationals and the creation of Chinese trade linkages," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 596-618, May.
- Hess, Wolfgang & Persson, Maria, 2010.
"The Duration of Trade Revisited. Continuous-Time vs. Discrete-Time Hazards,"
2010:1, Lund University, Department of Economics.
- Hess, Wolfgang & Persson, Maria, 2010. "The Duration of Trade Revisited: Continuous-Time vs. Discrete-Time Hazards," Working Paper Series 829, Research Institute of Industrial Economics.
- Nuno Crespo & Maria Paula Fontoura, 2005.
"Determinant Factors of FDI Spillovers – What Do We Really Know?,"
2005/06, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.
- Alyson Ma, 2006. "Export Spillovers to Chinese Firms: Evidence from Provincial Data," Journal of Chinese Economic and Business Studies, Taylor and Francis Journals, vol. 4(2), pages 127-149.
- Blomstrom, Magnus & Kokko, Ari, 1998.
" Multinational Corporations and Spillovers,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 12(3), pages 247-77, July.
- Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," CEPR Discussion Papers 1365, C.E.P.R. Discussion Papers.
- Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," Working Paper Series in Economics and Finance 99, Stockholm School of Economics.
- Wolfgang Hess & Maria Persson, 2011.
"Exploring the duration of EU imports,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 147(4), pages 665-692, November.
- Jarreau, Joachim & Poncet, Sandra, 2012. "Export sophistication and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 97(2), pages 281-292.
- Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992.
"Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,"
NBER Working Papers
3993, National Bureau of Economic Research, Inc.
- Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August.
- Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
- Pamina Koenig & Florian Mayneris & Sandra Poncet, 2009.
"Local export spillovers in France,"
PSE Working Papers
- Pamina Koenig & Florian Mayneris & Sandra Poncet, 2009. "Local Export Spillovers in France," Working Papers 2009-18, CEPII research center.
- Pamina Koenig & Florian Mayneris & Sandra Poncet, 2010. "Local Export spillovers in France," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) hal-00633782, HAL.
- 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.
- Aitken, Brian & Hanson, Gordon H. & Harrison, Ann E., 1997. "Spillovers, foreign investment, and export behavior," Journal of International Economics, Elsevier, vol. 43(1-2), pages 103-132, August.
- Aitken, B. & Hanson, G.H. & Harrison, A.E., 1994. "Spillovers, Foreign Investment and Export Behavior," Papers 95-06, Columbia - Graduate School of Business.
- XU, Bin & LU, Jiangyong, 2009. "Foreign direct investment, processing trade, and the sophistication of China's exports," China Economic Review, Elsevier, vol. 20(3), pages 425-439, September.
- Torfinn Harding & Beata Javorcik, 2011. "FDI and Export Upgrading," Economics Series Working Papers 526, University of Oxford, Department of Economics.
- Cheung Kui-yin & Lin, Ping, 2004. "Spillover effects of FDI on innovation in China: Evidence from the provincial data," China Economic Review, Elsevier, vol. 15(1), pages 25-44.
- Koenig, Pamina, 2009.
"Agglomeration and the export decisions of French firms,"
Journal of Urban Economics,
Elsevier, vol. 66(3), pages 186-195, November.
- Pamina Koenig, 2005. "Agglomeration and the Export Decision of French Firms," Working Papers 2005-02, Centre de Recherche en Economie et Statistique.
- Koenig, Pamina, 2010. "Local export spillovers in France," Open Access publications from UniversitÃ© catholique de Louvain info:hdl:2078.1/33465, Université catholique de Louvain.
- Rodriguez-Clare, Andres, 1996. "Multinationals, Linkages, and Economic Development," American Economic Review, American Economic Association, vol. 86(4), pages 852-73, September.
- Li, Xiaoying & Liu, Xiaming & Parker, David, 2001. "Foreign direct investment and productivity spillovers in the Chinese manufacturing sector," Economic Systems, Elsevier, vol. 25(4), pages 305-321, December.
- Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
- Sebastian Krautheim, 2007. "Gravity and Information: Heterogeneous Firms, Exporter Networks and the 'Distance Puzzle'," Economics Working Papers ECO2007/51, European University Institute.
- Caves, Richard E, 1974. "Multinational Firms, Competition, and Productivity in Host-Country Markets," Economica, London School of Economics and Political Science, vol. 41(162), pages 176-93, May.
- Horst Raff & Natalia Trofimenko, 2013.
"World Market Access of Emerging-Market Firms: The Role of Foreign Ownership and Access to External Finance,"
CESifo Working Paper Series
4346, CESifo Group Munich.
- Horst Raff & Natalia Trofimenko, 2013. "World Market Access of Emerging-Market Firms: the Role of Foreign Ownership and Access to External Finance," Kiel Working Papers 1848, Kiel Institute for the World Economy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.