Surviving together: Domestic inter-firm linkages and export performance of Chinese firms during trade crisis

Despite the extensive research on how firms individually respond to external trade shocks, there remains limited understanding of how exporters, connected through domestic buyer-seller relationships, collectively navigate and survive in foreign markets when confronted with unexpected export crises amid multiple trade risks. Using antidumping cases of Chinese exporters during 2009–2016, this paper empirically investigates how domestic production networks shape firms’ responsive export strategies during a trade crisis via inter-firm linkages. We find that domestic inter-firm linkages do help firms survive better once they face antidumping investigations. We also show that the characteristics of inter-firm linkages between firms and their linked partners are important. If the business linkages are closer, stronger, and more resilient in the domestic networks, firms benefit more from surviving together. Furthermore, it is shown that domestic production networks improve the survival performance of Chinese exporters through three channels of quality adjustment, introducing new products as well as export market sharing. The estimation results remain unchanged after controlling for the geographic spillover of export agglomeration in the neighborhood region. Our findings offer a novel insight into understanding how firms may respond and manage to survive together through domestic inter-firm linkages during a trade crisis.