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Interrelationship among foreign presence, domestic sales and export intensity in Chinese manufacturing industries

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  • Sizhong Sun
  • Sajid Anwar

Abstract

Using panel data on six Chinese manufacturing industries over the period 2005--2007, this article explores the interrelationship among foreign presence, domestic sales and export intensity of local firms. We find that the domestic sales and exports are complementary for local firms in China’s pharmaceutical industry, whereas in the case of the textile, transportation equipment, beverage, communication equipment and general equipment manufacturing industries, domestic sales and exports are substitutes. An increase in the average domestic sales increases foreign presence in all industries. The same applies to an increase in the average export intensity. An increase in the level of competition in China’s textile industry increases the export intensity as well as domestic sales of local textile firms. However, an increase in the level of competition in the pharmaceutical industry leads to a very large decrease in export intensity of local pharmaceutical firms. In the case of China’s transportation equipment manufacturing industry, an increase in the level of competition decreases domestic sales of local firms. Furthermore, an increase in the firm size increases domestic sales of Chinese firms in all six manufacturing industries.

Suggested Citation

  • Sizhong Sun & Sajid Anwar, 2016. "Interrelationship among foreign presence, domestic sales and export intensity in Chinese manufacturing industries," Applied Economics, Taylor & Francis Journals, vol. 48(26), pages 2443-2453, June.
  • Handle: RePEc:taf:applec:v:48:y:2016:i:26:p:2443-2453
    DOI: 10.1080/00036846.2015.1122733
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    Cited by:

    1. Mohammed Ershad Hussain & Mahfuzul Haque, 2016. "Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh," Economies, MDPI, vol. 4(2), pages 1-14, April.
    2. Van Ha & Mark J. Holmes & Gazi Hassan, 2020. "Does foreign investment benefit the exporting activities of Vietnamese firms?," The World Economy, Wiley Blackwell, vol. 43(6), pages 1619-1646, June.
    3. Sajid Anwar & Sizhong Sun, 2016. "Foreign direct investment, domestic sales and exports of local firms: a regional perspective from China," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(3), pages 325-338, July.
    4. Quang Hoan Truong & Van Chung Dong, 2021. "Spillover Effects of Foreign and Domestic Exporting Firms on Export Decisions of Local Manufacturing Firms: Evidence from Viet Nam," Working Papers DP-2021-43, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Haoyuan Ding & Kees G. Koedijk & Chang Li & Tong Qi, 2021. "The internationalisation of Chinese firms: Impact of FDI experience on export performance," The World Economy, Wiley Blackwell, vol. 44(12), pages 3609-3640, December.

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