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Spatial ExportersFabrice DefeverUniversity of Nottingham - School of Economics; CEP at the LSE Benedikt HeidIfo Institute for Economic Research - International Trade; University of Bayreuth - Chair of Empirical Economics Mario LarchUniversity of Bayreuth; CESifo; Ifo Institute for Economic Research; GEP at the University of Nottingham December 14, 2011 CESifo Working Paper Series No. 3672 Abstract: In this paper, we provide evidence that expanding firms tend to serve new markets which are geographically close and culturally related to their prior export destinations. We quantify the impact of this spatial pattern using a Chinese firm-level data set. To ensure an exogenous set of potential new destinations (25 EU countries, US and Canada) and an exogenous timing of entry, we focus on firms that benefited from the abrupt end of the textile quota restrictions in 2005. Controlling for firm-product and destination specific effects and accounting for possible multiple new export destinations we show that the probability to export to a country increases by 15 to 38 percent for each prior export destination with a geographical or cultural link with this country.
Number of Pages in PDF File: 36 Keywords: export destination choice, spatial correlation, firm-level customs data, MFA/ATC quota removal JEL Classification: F120, F130, C250 working papers seriesDate posted: December 14, 2011Suggested CitationContact Information
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