Firm Productivity and Sales Destinations: Evidence From Within China

15 Pages Posted: 21 Nov 2014

See all articles by Jiuli Huang

Jiuli Huang

Nankai University

Yanling Wang

Carleton University

Qun Bao

Nankai University

Date Written: January 2015

Abstract

This paper builds on and extends the literature on the linkage between firm productivity and their export destinations to study the productivity of Chinese firms and their sales destinations in other provinces within China. Moving the study from international markets to domestic markets conveniently avoids the hard to control heterogeneity across different destination markets in international trade, as provincial markets within China are less heterogeneous than international markets but segmented by Chinese provincial borders. The paper explicitly controls the fact that many firms only sell in their home provinces by using the zero-inflated negative binomial method. It finds that firms with higher productivity tend to sell in other provincial markets, and more productive firms enter more provincial markets. The results are robust.

Suggested Citation

Huang, Jiuli and Wang, Yanling and Bao, Qun, Firm Productivity and Sales Destinations: Evidence From Within China (January 2015). Economic Inquiry, Vol. 53, Issue 1, pp. 205-219, 2015. Available at SSRN: https://ssrn.com/abstract=2528859 or http://dx.doi.org/10.1111/ecin.12150

Jiuli Huang (Contact Author)

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Yanling Wang

Carleton University ( email )

1125 colonel By Drive
Ottawa, Ontario K1S 5B6
Canada
(613) 520-2600x2626 (Phone)

Qun Bao

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

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