The role of foreign firms in domestic exporting
This paper investigates the impact of foreign firms on exports of domestic exporting firms. We show that domestic firms respond to an increase in the presence of foreign firms by increasing their exports, despite the increase in foreign presence can drive up the production cost and make domestic market more profitable. This hypothesis is then tested in China, where we find a 1 per cent increase in foreign presence causes domestic firms to increase their exports by 0.74 per cent. This finding sheds light on understanding China’s massive exports and fast inflow of foreign investment observed in the past three decades.
|Date of creation:||Nov 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mark J. Melitz, 2002.
"The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity,"
NBER Working Papers
8881, National Bureau of Economic Research, Inc.
- Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
- Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
- Yih-Chyi Chuang & Pi-Fum Hsu, 2004. "FDI, trade, and spillover efficiency: evidence from China's manufacturing sector," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1103-1115.
- Greenaway, David & Sousa, Nuno & Wakelin, Katharine, 2004. "Do domestic firms learn to export from multinationals?," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1027-1043, November.
- David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages F134-F161, 02.
- Andrew B. Bernard & J. Bradford Jensen, 2001.
"Why Some Firms Export,"
NBER Working Papers
8349, National Bureau of Economic Research, Inc.
- Albert G. Z. Hu & Gary H. Jefferson & Qian Jinchang, 2005. "R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 780-786, November.
- John Shea, 1996.
"Instrument Relevance in Multivariate Linear Models: A Simple Measure,"
NBER Technical Working Papers
0193, National Bureau of Economic Research, Inc.
- John Shea, 1997. "Instrument Relevance in Multivariate Linear Models: A Simple Measure," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 348-352, May.
- Eichenbaum, Martin S & Hansen, Lars Peter & Singleton, Kenneth J, 1988.
"A Time Series Analysis of Representative Agent Models of Consumption and Leisure Choice under Uncertainty,"
The Quarterly Journal of Economics,
MIT Press, vol. 103(1), pages 51-78, February.
- Martin S. Eichenbaum & Lars Peter Hansen & Kenneth J. Singleton, 1986. "A Time Series Analysis of Representative Agent Models of Consumption andLeisure Choice Under Uncertainty," NBER Working Papers 1981, National Bureau of Economic Research, Inc.
- Liu, Zhiqiang, 2002. "Foreign Direct Investment and Technology Spillover: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 579-602, September.
- Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
- Mark E Schaffer, 2005. "XTIVREG2: Stata module to perform extended IV/2SLS, GMM and AC/HAC, LIML and k-class regression for panel data models," Statistical Software Components S456501, Boston College Department of Economics, revised 22 Feb 2015.
- Blomström, Magnus & Kokko, Ari, 1996.
"Multinational Corporations and Spillovers,"
SSE/EFI Working Paper Series in Economics and Finance
99, Stockholm School of Economics.
- Aitken, B. & Hanson, G.H. & Harrison, A.E., 1994.
"Spillovers, Foreign Investment and Export Behavior,"
95-06, Columbia - Graduate School of Business.
- Aitken, Brian & Hanson, Gordon H. & Harrison, Ann E., 1997. "Spillovers, foreign investment, and export behavior," Journal of International Economics, Elsevier, vol. 43(1-2), pages 103-132, August.
- Brian Aitken & Gordon H. Hanson & Ann E. Harrison, 1994. "Spillovers, Foreign Investment, and Export Behavior," NBER Working Papers 4967, National Bureau of Economic Research, Inc.
- Görg, Holger & Henry, Michael & Strobl, Eric, 2007.
"Grant Support and Exporting Activity,"
CEPR Discussion Papers
6054, C.E.P.R. Discussion Papers.
- Görg, Holger & Henry, Michael & Strobl, Eric, 2008. "Grant support and exporting activity," Open Access Publications from Kiel Institute for the World Economy 4288, Kiel Institute for the World Economy (IfW).
- Peter J Buckley & Jeremy Clegg & Chengqi Wang, 2007. "Is the relationship between inward FDI and spillover effects linear? An empirical examination of the case of China," Journal of International Business Studies, Palgrave Macmillan, vol. 38(3), pages 447-459, May.
- Richard Kneller & Mauro Pisu, 2007. "Industrial Linkages and Export Spillovers from FDI," The World Economy, Wiley Blackwell, vol. 30(1), pages 105-134, 01.
- Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
- Liu, Zhiqiang, 2008. "Foreign direct investment and technology spillovers: Theory and evidence," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 176-193, February.
- Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-54, July.
- David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
- Li, Xiaoying & Liu, Xiaming & Parker, David, 2001. "Foreign direct investment and productivity spillovers in the Chinese manufacturing sector," Economic Systems, Elsevier, vol. 25(4), pages 305-321, December.
- Gary Jefferson & Thomas Rawski & Yifan Zhang, 2008. "Productivity growth and convergence across China's industrial economy," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 121-140.
- Sizhong Sun, 2009. "How Does FDI Affect Domestic Firms' Exports? Industrial Evidence," The World Economy, Wiley Blackwell, vol. 32(8), pages 1203-1222, 08.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:18486. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.