IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v110y2014icp79-92.html
   My bibliography  Save this article

From Beijing to Bentonville: Do multinational retailers link markets?

Author

Listed:
  • Head, Keith
  • Jing, Ran
  • Swenson, Deborah L.

Abstract

Four of the world's five largest retailers—Walmart, Carrefour, Tesco, and Metro—entered China after 1995, following new policies that allowed foreign retailers to participate more fully in the Chinese retail market. As each retailer added both stores and global procurement centers, they created unique footprints that caused Chinese cities to be differentially exposed to the activities of these global retailers. We exploit these differences to identify the effect of multinational retailer presence on city–country exports of retail goods. We find robust evidence that increased exposure to multinational retailers was followed by rising exports. Since the export expansions are not limited to the connections formed by the retailers' bilateral networks, our evidence suggests that the growing presence of global retailers operated, at least in part, by enhancing the general export capabilities of the affected cities.

Suggested Citation

  • Head, Keith & Jing, Ran & Swenson, Deborah L., 2014. "From Beijing to Bentonville: Do multinational retailers link markets?," Journal of Development Economics, Elsevier, vol. 110(C), pages 79-92.
  • Handle: RePEc:eee:deveco:v:110:y:2014:i:c:p:79-92
    DOI: 10.1016/j.jdeveco.2014.04.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387814000509
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andrew B. Bernard & J. Bradford Jensen & Stephen Redding & Peter K. Schott, 2010. "Wholesalers and Retailers in U.S. Trade (Long Version)," CEP Discussion Papers dp0968, Centre for Economic Performance, LSE.
    2. Thomas Chaney, 2018. "The Gravity Equation in International Trade: An Explanation," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 150-177.
    3. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2010. "Wholesalers and Retailers in US Trade," American Economic Review, American Economic Association, vol. 100(2), pages 408-413, May.
    4. Beata S. Javorcik & Mariana Spatareanu, 2009. "Tough Love: Do Czech Suppliers Learn from their Relationships with Multinationals?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 811-833, December.
    5. Beata Javorcik & Wolfgang Keller & James Tybout, 2008. "Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers," The World Economy, Wiley Blackwell, vol. 31(12), pages 1558-1580, December.
    6. Elhanan Helpman & Oleg Itskhoki & Marc-Andreas Muendler & Stephen J. Redding, 2017. "Trade and Inequality: From Theory to Estimation," Review of Economic Studies, Oxford University Press, vol. 84(1), pages 357-405.
    7. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    8. Ahn, JaeBin & Khandelwal, Amit K. & Wei, Shang-Jin, 2011. "The role of intermediaries in facilitating trade," Journal of International Economics, Elsevier, vol. 84(1), pages 73-85, May.
    9. Javorcik, Beata S. & Li, Yue, 2013. "Do the biggest aisles serve a brighter future? Global retail chains and their implications for Romania," Journal of International Economics, Elsevier, vol. 90(2), pages 348-363.
    10. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    11. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    12. Saxonhouse, Gary R, 1976. "Estimated Parameters as Dependent Variables," American Economic Review, American Economic Association, vol. 66(1), pages 178-183, March.
    13. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    14. Bernardo S. Blum & Sebastian Claro & Ignatius Horstmann, 2010. "Facts and Figures on Intermediated Trade," American Economic Review, American Economic Association, vol. 100(2), pages 419-423, May.
    15. Michael Baker & Nicole M. Fortin, 2001. "Occupational gender composition and wages in Canada, 1987-1988," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 345-376, May.
    16. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    17. Emek Basker & Pham Hoang Van, 2010. "Imports "Я" Us: Retail Chains as Platforms for Developing-Country Imports," American Economic Review, American Economic Association, vol. 100(2), pages 414-418, May.
    18. James E. Rauch & Vitor Trindade, 2003. "Information, International Substitutability, and Globalization," American Economic Review, American Economic Association, vol. 93(3), pages 775-791, June.
    19. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Bo, 2017. "Upstreamness, exports, and wage inequality: Evidence from Chinese manufacturing data," Journal of Asian Economics, Elsevier, vol. 48(C), pages 66-74.
    2. Contessi, Silvio, 2010. "Multinational Firms' Entry and Productivity: Some Aggregate Implications of Firm-level Heterogeneity," Working Papers 2010-043, Federal Reserve Bank of St. Louis, revised 26 Aug 2015.
    3. Cheptea, Angela & Emlinger, Charlotte & Latouche, Karine, 2014. "Do exporting firms benefit from retail internationalization? Evidence from France," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182706, European Association of Agricultural Economists.
    4. repec:spr:weltar:v:153:y:2017:i:3:d:10.1007_s10290-017-0284-2 is not listed on IDEAS
    5. Cheptea, Angela & Emlinger, Charlotte & Latouche, Karine, 2012. "Multinational Retailers and Home Country Exports," 2012: New Rules of Trade? December 2012, San Diego, California 142777, International Agricultural Trade Research Consortium.
    6. Emlinger, Charlotte & Poncet, Sandra, 2018. "With a little help from my friends: Multinational retailers and China's consumer market penetration," Journal of International Economics, Elsevier, vol. 112(C), pages 1-12.
    7. Emily Blanchard & Tatyana Chesnokova & Gerald Willmann, 2013. "Private Labels and International Trade: Trading Variety for Volume," CESifo Working Paper Series 4133, CESifo Group Munich.
    8. repec:bla:pacecr:v:22:y:2017:i:1:p:123-143 is not listed on IDEAS
    9. Asian Development Bank Institute, 2017. "Asian Economic Integration Report 2016," Working Papers id:11730, eSocialSciences.
    10. Pierpaolo Andriani & Carsten Herrmann-Pillath, 2015. "Transactional innovation as performative action: transforming comparative advantage in the global coffee business," Journal of Evolutionary Economics, Springer, vol. 25(2), pages 371-400, April.
    11. Angela Cheptea & Charlotte Emlinger & Karine Latouche, 2015. "Exporting firms and retail internationalization. Evidence from France," Working Papers SMART - LERECO 15-13, INRA UMR SMART-LERECO.
    12. repec:gam:jscscx:v:8:y:2019:i:2:p:53-:d:205871 is not listed on IDEAS
    13. repec:eee:chieco:v:53:y:2019:i:c:p:254-270 is not listed on IDEAS
    14. Cheptea, Angela & Emlinger, Charlotte & Latouche, Karine, 2013. "Multinational Retailers and Firm-Level Exports," 2013: Employment, Immigration and Trade, December 15-17, 2013, Clearwater Beach, Florida 182499, International Agricultural Trade Research Consortium.
    15. Kondor, Péter & Koren, Miklós & Pál, Jenő & Szeidl, Ádám, 2014. "Cégek kapcsolati hálózatainak gazdasági szerepe
      [The economic role of the networks of connections possessed by firms]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1341-1360.
    16. Loretta Fung & Jin Tan Liu & Deborah L. Swenson, 2014. "Multinational Location Decisions and the Access to Imported Inputs," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 218-237, June.
    17. Raff, Horst & Schmitt, Nicolas, 2015. "Retailing and international trade: A survey of the literature," Economics Working Papers 2015-02, Christian-Albrechts-University of Kiel, Department of Economics.
    18. Lin, Faqin & Hu, Cui & Fuchs, Andreas, 2016. "How Do Firms Respond to Political Tensions? The Heterogeneity of the Dalai Lama Effect on Trade," Working Papers 0628, University of Heidelberg, Department of Economics.
    19. Deborah L. Swenson & Huiya Chen, 2014. "Multinational Exposure and the Quality of New Chinese Exports," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(1), pages 41-66, February.
    20. Bai, Xue & Krishna, Kala & Ma, Hong, 2017. "How you export matters: Export mode, learning and productivity in China," Journal of International Economics, Elsevier, vol. 104(C), pages 122-137.
    21. Angela Cheptea, 2014. "Do multinational retailers affect the export competitveness of host countries?," IAW Discussion Papers 106, Institut für Angewandte Wirtschaftsforschung (IAW).
    22. Andriani, Pierpaolo & Herrmann-Pillath, Carsten, 2011. "Performing comparative advantage: The case of the global coffee business," Frankfurt School - Working Paper Series 167, Frankfurt School of Finance and Management.
    23. Cheptea, Angela, 2016. "Multinational retailers and host countries’ export competitiveness," 149th Seminar, October 27-28, 2016, Rennes, France 244952, European Association of Agricultural Economists.

    More about this item

    Keywords

    Multinational retailers; China; Exports;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F39 - International Economics - - International Finance - - - Other
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:110:y:2014:i:c:p:79-92. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/devec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.