Chinese Firms' Entry to Export Markets : The Role of Foreign Export Spillovers

In this paper, the effect of proximity to multinational exporters on the creation of new export linkages (the extensive margin of trade) is debated. Using panel data from Chinese customs for 1997-2007, the capacity for Chinese domestic firms to begin exporting new varieties to new markets is shown to respond positively to the export activity of neighboring foreign firms. These spillovers are shown to be product and country specific. This conclusion is robust to fixed effects and instrumental variable specifications that control for both supply and demand shocks that could bias the estimations. The impact is sizable. The marginal impact of product-country-specific foreign export spillovers is five times as large as the effect of a 10 percent increase in the demand for the product in the destination country. Foreign export spillovers are also shown to be primarily limited to ordinary trade activities. Overall, our findings suggest that even for a country with an important cost-advantage such as China, there is room for initiatives from policy-makers that will diffuse best practices regarding export experience among exporters.

Bibliographic Details

Main Authors:	Mayneris, Florian, Poncet, Sandra
Language:	English en_US
Published:	World Bank, Washington, DC 2013-04
Subjects:	AGRICULTURAL PRODUCTS, AGRICULTURE, BENCHMARK, BILATERAL TRADE, BILATERAL TRADE FLOWS, CAPACITY BUILDING, CHANNELS, COMPARATIVE ADVANTAGE, COMPARATIVE ADVANTAGES, CONSTRUCTION, CONSUMERS, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DIRECT INVESTMENT, DOMESTIC EXPORTERS, DOMESTIC FIRMS, ECONOMIC ACTIVITY, ECONOMIC AGREEMENTS, ECONOMIC GROWTH, ECONOMIC POLICY, ENDOGENOUS VARIABLES, EXPORT, EXPORT ACTIVITIES, EXPORT ACTIVITY, EXPORT CATALYSTS, EXPORT DEMAND, EXPORT EXPERIENCE, EXPORT GROWTH, EXPORT MARKETS, EXPORT PERFORMANCE, EXPORT PROCESSING, EXPORT PROCESSING ZONES, EXPORT PRODUCT, EXPORT PROMOTION, EXPORT PROMOTION POLICIES, EXPORT TRANSACTION, EXPORTING FIRMS, EXPORTS, EXTERNALITIES, FOREIGN DEMAND, FOREIGN EXPORT, FOREIGN EXPORTS, FOREIGN FIRMS, FOREIGN INVESTMENT, FOREIGN INVESTORS, FOREIGN MARKETS, FOREIGN TRADE, FRAGMENTATION OF PRODUCTION, GDP, GDP PER CAPITA, GROWTH RATE, IMPORTANT ROLE, IMPORTED INPUTS, IMPORTING COUNTRY, IMPORTS, INCOME, INDUSTRIAL PRODUCTION, INTERNATIONAL BUSINESS, INTERNATIONAL DEMAND, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, IRON, JOINT VENTURES, LABOR MARKETS, MANUFACTURING SECTOR, MARKET SIZE, MULTINATIONAL FIRMS, NATURAL ENDOWMENTS, POSITIVE EXTERNALITIES, PRODUCTIVITY, QUANTIFICATION, TRADE LIBERALIZATION, WAGES,
Online Access:	http://documents.worldbank.org/curated/en/2013/04/17532262/chinese-firms-entry-export-markets-role-foreign-export-spillovers https://hdl.handle.net/10986/13204
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