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

39 Pages Posted: 20 Apr 2016

See all articles by Florian Mayneris

Florian Mayneris

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Sandra Poncet

Université Paris I Panthéon-Sorbonne; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: April 1, 2013

Abstract

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.

Keywords: Tax Law, Economic Theory & Research, Foreign Trade Promotion and Regulation, Water Resources Assessment, Water Conservation

Suggested Citation

Mayneris, Florian and Poncet, Sandra, Chinese Firms'Entry to Export Markets: The Role of Foreign Export Spillovers (April 1, 2013). World Bank Policy Research Working Paper No. 6398, Available at SSRN: https://ssrn.com/abstract=2245475

Florian Mayneris (Contact Author)

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Sandra Poncet

Université Paris I Panthéon-Sorbonne ( email )

12, place du Panthéon
Paris, IL
France

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 Rue Georges Pitard
Paris Cedex 15, F-75015
France

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