Distribution margins and distribution-oriented FDI: Evidence from China

Wei Tian and Xinhong Wu

Emerging Markets Review, 2024, vol. 62, issue C

Abstract: This paper constructs a new measure of distribution margins that covers more countries than that in the World Input–Output Database. Based on this measure, we develop a set of stylized facts and examine the effect of distribution margins on exporters' distribution-oriented foreign direct investment decision using customs data and foreign direct investment decision data from China. We find that higher distribution margins in destination countries drive exporters to conduct distribution-oriented foreign direct investment. Compared with specialized export intermediaries, manufacturers have a greater incentive to invest in distribution sectors abroad when faced with higher distribution margins.

Keywords: Distribution margins; Distribution-oriented FDI; Input-output table; Exporter integration (search for similar items in EconPapers)
JEL-codes: F23 O12 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:62:y:2024:i:c:s1566014124000645

DOI: 10.1016/j.ememar.2024.101169

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