Learning from Neighbors' Export Activities: Evidence from Exporters' Survival

Ana Fernandes and Heiwai Tang

No 337, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: Recent studies in international trade report that new exporters often start selling small amounts and cease exporting in the first year. These findings re.ect a substantial amount of uncertainty facing new exporters. In this paper we study whether export activities in the neighborhood reveal information about export profitability and thus enhance new exporters. performance. Using transaction-level data for the universe of exporters in China over the period of 2001-2005, we find that new exporters' first-year sales and probability of survival are both higher in cities where there are more existing export activities in the same market (industry or destination country). Export activities in other markets do not generate any positive spillovers, and in some cases we find negative spillovers. Spillovers from processing exporters are weaker. Foreign exporters benefit less from neighboring export activities. The relation between the magnitude of spillovers and the proxies for demand uncertainty is non-monotonic. We empirically verify that our findings are unlikely to be spurious or resulted from spillovers through the credit-constraint or the imported-material channels.

Keywords: Knowledge Spillovers; Uncertainty; Export Dynamics; Multi-Product Exporters (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
Pages: 54
Date: 2012-07-16, Revised 2012-07-16
New Economics Papers: this item is included in nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Learning from Neighbors' Export Activities: Evidence from Exporters' Survival (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:337

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