Does agglomeration promote internationalization of Chinese firms?

Banri Ito, Zhaoyuan Xu and Naomitsu Yashiro

China Economic Review, 2015, vol. 34, issue C, 109-121

Abstract: Knowledge spillover from the agglomeration of exporters can reduce the initial costs of exporting faced by other firms and thereby facilitate exports. We use a large dataset of Chinese manufacturing firms to assess whether industrial agglomeration lowers the minimum productivity level required for exporting and whether it increases a firm's probability of exporting. Semi-parametric quantile regressions reveal that the productivity advantage of exporters against non-exporters is markedly smaller in agglomerated regions. Furthermore, a parametric estimation of an export entry model indicates that the agglomeration of incumbent exporters contributes significantly to export participation, although its magnitude is limited. These spillover effects are generated not only by the agglomeration of exporting foreign invested firms (FIFs), but also, more importantly, by that of indigenous Chinese exporters. In fact, the agglomeration of exporting FIFs only contributes to the export entry of FIFs.

Keywords: Agglomeration; Export; Spillover; Productivity (search for similar items in EconPapers)
JEL-codes: F14 R12 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Does Agglomeration Promote the Internationalization of Chinese Firms? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:34:y:2015:i:c:p:109-121

DOI: 10.1016/j.chieco.2015.03.009

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