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Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers

  • Florian Mayneris
  • Sandra Poncet

In this study, we explore how the intensity of foreign export spillovers in China varies depending on the difficulty of entry on export markets. We rely on different proxies to define what a “difficult” country is and we find that the presence of surrounding foreign exporting firms helps domestic ones to start exporting, especially when destination countries are difficult. While on average exposure to foreign exporters is associated with a 10% increase of the probability that domestic firms from the same province start exporting the year after, the figure is around 50% higher when the targeted destination country is identified as difficult. Our results are consistent with the idea that exposure to foreign exporters helps to reduce the fixed cost of creating new trade linkages. Our finding hence suggests that the increasing presence of foreign exporting firms in China might contribute to the diversification of Chinese domestic firms? exports towards more difficult and previously inaccessible destinations.

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Paper provided by CEPII research center in its series Working Papers with number 2011-32.

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Date of creation: Dec 2011
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Handle: RePEc:cii:cepidt:2011-32
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  1. Wolfgang Hess & Maria Persson, 2012. "The duration of trade revisited," Empirical Economics, Springer, vol. 43(3), pages 1083-1107, December.
  2. Aitken, B. & Hanson, G.H. & Harrison, A.E., 1994. "Spillovers, Foreign Investment and Export Behavior," Papers 95-06, Columbia - Graduate School of Business.
  3. 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.
  4. 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.
  5. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
  6. Matthieu Crozet & Pamina Koenig & Vincent Rebeyrol, 2008. "Exporting to Insecure Markets: a Firm-Level Analysis," Working Papers 2008-13, CEPII research center.
  7. Frances Ruane & Julie Sutherland, 2005. "Foreign Direct Investment and Export Spillovers: How Do Export Platforms Fare?," The Institute for International Integration Studies Discussion Paper Series iiisdp058, IIIS.
  8. Sebastian Krautheim, 2007. "Gravity and Information: Heterogeneous Firms, Exporter Networks and the 'Distance Puzzle'," Economics Working Papers ECO2007/51, European University Institute.
  9. Duranton, Gilles & Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2010. "The Economics of Clusters: Lessons from the French Experience," OUP Catalogue, Oxford University Press, number 9780199592203, March.
  10. KOENIG, Pamina & MAYNERIS, Florian & PONCET, Sandra, . "Local export spillovers in France," CORE Discussion Papers RP -2225, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. BARRIOS, Salvador & GÖRG, Holger & STROBL, Eric, . "Explaining firms' export behaviour: R&D, spillovers and the destination market," CORE Discussion Papers RP -1654, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. repec:cup:cbooks:9780521715348 is not listed on IDEAS
  13. Luis Araujo & Giordano Mion & Emanuel Ornelas, 2012. "Institutions and Export Dynamics," CEP Discussion Papers dp1118, Centre for Economic Performance, LSE.
  14. repec:cup:cbooks:9780521887427 is not listed on IDEAS
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