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

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  • MAYNERIS, Florian

    () (Université catholique de Louvain, CORE & IRES, B-1348 Louvain-la-Neuve, Belgium)

  • PONCET, Sandra

    () (Paris School of Economics, Université Paris 1 and CEPII)

Abstract

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.

Suggested Citation

  • MAYNERIS, Florian & PONCET, Sandra, 2011. "Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers," CORE Discussion Papers 2011063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2011063
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    References listed on IDEAS

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    Cited by:

    1. Florian Mayneris & Sandra Poncet, 2011. "French Firms at the Conquest of Asian Markets: The Role of Export Spillovers," Working Papers 2011-31, CEPII research center.
    2. 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.

    More about this item

    Keywords

    foreign export spillovers; difficult markets; China;

    JEL classification:

    • F1 - International Economics - - Trade
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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