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Uncertainty and enterprise export recovery in China: Does the market integration matter?

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  • Xiugang Zhu
  • Kangjuan Lv
  • Jingkai Gao

Abstract

Maintaining the stability of foreign trade in an uncertain environment is crucial to building a new development pattern. By combing through the existing literature, this paper analyzes the impact of economic policy uncertainty on enterprise export recovery from the perspective of market integration. Firstly, theoretical analysis shows that economic policy uncertainty is expected to attenuate enterprise export recovery levels by amplifying export transaction costs. Secondly, the escalation in market integration is anticipated to mitigate the attenuation above effect through the mechanism of "enhanced production efficiency", while simultaneously amplifying it through the mechanism of "intensified market competition". Based on the empirical test of China’s micro-level data, it is found that the rise of market integration generally alleviates the weakening effect of economic policy uncertainty on enterprise export resilience, and this mitigation effect is more obvious for high-efficiency enterprises; The test results of further mechanism analysis and heterogeneity analysis are also consistent with the logic of theoretical analysis.

Suggested Citation

  • Xiugang Zhu & Kangjuan Lv & Jingkai Gao, 2024. "Uncertainty and enterprise export recovery in China: Does the market integration matter?," PLOS ONE, Public Library of Science, vol. 19(12), pages 1-21, December.
    • Handle: RePEc:plo:pone00:0309428
    DOI: 10.1371/journal.pone.0309428
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    References listed on IDEAS

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    2. Dennis Novy & Alan M. Taylor, 2020. "Trade and Uncertainty," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 749-765, October.
    3. Manova, Kalina & Yu, Zhihong, 2016. "How firms export: Processing vs. ordinary trade with financial frictions," Journal of International Economics, Elsevier, vol. 100(C), pages 120-137.
    4. Poncet, Sandra, 2003. "Measuring Chinese domestic and international integration," China Economic Review, Elsevier, vol. 14(1), pages 1-21.
    5. Feng, Ling & Li, Zhiyuan & Swenson, Deborah L., 2017. "Trade policy uncertainty and exports: Evidence from China's WTO accession," Journal of International Economics, Elsevier, vol. 106(C), pages 20-36.
    6. Nga Trinh, 2024. "Economic Policy Uncertainty and Corporate Investment Efficiency: Evidence from Australian Energy Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 53-60, January.
    7. Antoine Gervais, 2021. "Global sourcing under uncertainty," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(3), pages 1103-1135, November.
    8. Gianluca Benigno & Jan J. J. Groen, 2020. "Uncertainty about Trade Policy Uncertainty," Staff Reports 919, Federal Reserve Bank of New York.
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